Purpose – The purpose of this paper is to examine use of the Black‐Scholes (BS) risky asset model to determine choice of optimal investment term in a reinvestment chain model. Design/methodology/approach – An extension of Tobin's separation theorem is used to establish a mean‐variance...

Purpose – The purpose of this paper is to examine use of the Black-Scholes (BS) risky asset model to determine choice of optimal investment term in a reinvestment chain model. Design/methodology/approach – An extension of Tobin's separation theorem is used to establish a mean-variance...