The Separation Principle States That an Investor Will

Multiple Choice

The separation principle states that an investor will:

A) choose between any efficient portfolio and a riskless asset to generate the desired expected return.
B) choose a portfolio from the efficient set based on individual risk tolerance.
C) never choose to invest in a riskless asset due to the low expected rate of return.
D) combine a riskless asset with the tangency portfolio based on their risk tolerance level.
E) combine a riskless asset with the minimum variance portfolio based on their risk tolerance level.