Suppose that you have found the optimal risky combination using all risky assets available in the economy, and that this optimal risky portfolio has an expected return of 0.19 and standard deviation of 0.27. The T-bill rate is 0.03.

What fraction of your money must be invested in the risk-free asset in order to form a complete portfolio with an expected return of 0.09?

Round your answer to 4 decimal places. For example, if your answer is 3.205%, then please write down 0.0321.

Which of the following statements regarding risk-averse investors is true?

Group of answer choices

They only accept risky investments that offer risk premiums over the risk-free rate.

They are willing to accept lower returns and high risk.

They only care about the rate of return.

They accept investments that are fair games.