An investor's degree of risk aversion will determine his or her optimal mix of the risk-free asset and risky asset.
Risk aversion can be referred to or considered as the measure to which an investor avoids taking any risks for generating any sort of returns over his or her investments through monetary engagement.
Moreover, the concept of risk-aversion may be referred to completely avoiding capital risks related to the loss of assets or a decrease in the returns generated over the investments being made.
Learn more about risk-aversion here:
https://brainly.com/question/29609928
#SPJ4
