The separation theorem states that:
A) systematic risk is separate from unsystematic risk.
B) individual security risk is separate from portfolio risk.
C) the investment decision is separate from the financing decision.
D) the borrowing portfolio is separate from the lending portfolio.

Question

Quizplus · Accepted Answer

The separation theorem, particularly in the context of corporate finance, states that the investment decision can be made independently of the financing decision.

The Separation Theorem States That