Discuss standard investment opportunity locus

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Reference no: EM131947830

A Discuss a standard Investment Opportunity Locus, and how the choices of i) a very risk averse investor, ii) an investor with ‘normal’ risk aversion, and iii) a risk seeking investor will differ. b) Explain how money fits in a portfolio decision (as a riskless asset). In answering, show how money (as a riskless asset) alters the IOL and show an equilibrium holding of money and bonds. [Show and discuss the slope of this IOL]. Choose part c or d c) Explain and show what happens if interest rate on the risky asset rises. d) Explain and show what happens if wealth rises.

Reference no: EM131947830

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