Discuss Tobin’s portfolio balance theory. Explain with diagrams: (a) Eff ects of a change in the interest rate on the individual wealth holder’s asset portfolio. (b) Eff ects of a change in the...

Discuss Tobin’s portfolio balance theory.

Explain with diagrams:

(a) Eff ects of a change in the interest rate on the individual wealth holder’s asset portfolio.

(b) Eff ects of a change in the shape of the indiff erence curves on the individual wealth holder’s asset portfolio.

(c) Eff ects of a change in the risk on bonds on the individual wealth holder’s asset portfolio.