Suppose an investor equally allocates their wealth between a risk-free

Suppose an investor equally allocates their wealth between a risk-free asset and a risky asset. If the MRS of the current allocation is less than the slope of the budget line, then the investor should:

A) shift more of their wealth to the risky asset.
B) shift more of their wealth to the risk-free asset.
C) keep the same asset allocation.
D) We do not have enough information to answer this question.

ANSWER

A