Tobin's portfolio approach modifies Keynesian liquidity preference by introducing:

CA Foundation · Business Economics · MTP · September 2026
Tobin's portfolio approach modifies Keynesian liquidity preference by introducing:
(A) A. perfect certainty
(B) B. risk-neutral behaviour
(C) C. risk-return trade-off and diversification
(D) D. zero transaction costs

Suggested Answer and Working Notes:

Correct Answer: Option (C)

C. risk-return trade-off and diversification

Topics: Money Market

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