Explain the mm theory recommends investment

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Reference no: EM1363367

The MM theory recommends that investment and financing decisions should be separately considered and a firm need not consider existing investments (especially their future cash flows) in evaluating discounted cash flows of an investment project.

a) do you think that a gap analysis for asset-liability management is consistent with both these prescriptions

b) if there are inconsistencies, where and why do they exist?

c) is the duration-gap consistent with the MM theory?

Reference no: EM1363367

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