Behavioral portfolio theory
CFAI Vol 2 pg 38 says “The greater the concavity of the utility curve, the earlier the satiation of a specific security. Thus, the greater the concavity of the utility curve, the greater the number of securities included in the layer”.
Can someone explain why this is the case? I don’t seem to understand the relationship between the concavity of the utility curve and the number of assets in the layer.
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