Question

The exact indifference curves of different investors:_______

a) cannot be known with perfect certainty. can be calculated precisely with the use of advanced calculus.
b) although not known with perfect certainty, do allow the advisor to create more suitable portfolios for the client.
c) cannot be known with perfect certainty and, although not known with perfect certainty, do allow the advisor to create more suitable portfolios for the client.

Answer 1

Option c) cannot be known with perfect certainty and, although not known with perfect certainty, do allow the advisor to create more suitable portfolios for the client.

Step-by-step explanation:

The indifference curves notably cannot be calculated on a precise point but the theory does allow for the invention or creation of more suitable portfolios for investors that has dissimilar levels of risk tolerance.

An Indifference curve is commonly known as a line. The line depicts or shows combinations of goods among which a consumer is indifferent. It shows also the combinations of goods that can be are affordable. In the curve,consumer tend to not like or desire one combination of goods to another combination of goods that is shown on a curve/line.