Advice consistent with the basic m-v model

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1. Financial advisors generally recommend that their clients allocate more to higher risk-return asset classes (like equities) if their investment horizons are long.

  1. Is this advice consistent with the basic M-V model?
  2. Does adding a shortfall constraint to the M-V model make a difference? If so, how? If not, why not?
  3. Assuming investment opportunities change over time, what type of asset return behavior would justify this advice within the M-V framework?

Reference no: EM133073054

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