Question

analysis the effects of an increase in the price of bond on the expected return, risk...

analysis the effects of an increase in the price of bond on the expected return, risk , bond holding and money holding in the james tobin portfolio analysis demand for money.

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Answer #1

The key suggestion james tobin portfolio is that it suggests the value of assets in the liquid form should be kept with an individual.If there is uncertainity for the returns to be received from the bonds those bonds are risky in such case the investors maintain the bonds and money as his portfolios.Tobin emphasises the value of money as a valuable asset as lot of people hold it like an asset.Also the demand for the money comes with the risk and the returns involved with various issues.The demand for this monetary comes depending upon the term of real wealth beacause it can be measured in terms of ascertaining the total value of it.

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