indifference curve

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter7: Uncertainty
Section: Chapter Questions
Problem 7.14P
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An investor has utility function U (F, o;) and their portfolio faces the "risk-return
relationship" (constraint) o? = o?(r).
a. What are the optimality condition(s)' that define this consumer's optimal investment
portfolio? Show these optimality condition(s) on a utility (indifference curve) diagram,
and explain briefly in plain (non-mathematical) terms
Transcribed Image Text:An investor has utility function U (F, o;) and their portfolio faces the "risk-return relationship" (constraint) o? = o?(r). a. What are the optimality condition(s)' that define this consumer's optimal investment portfolio? Show these optimality condition(s) on a utility (indifference curve) diagram, and explain briefly in plain (non-mathematical) terms
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