"The average rate of return on investments in large stocks has outpaced that on investments in Treasury bills by over 8% since 1926. Why, then, does anyone invest in Treasury bills? What is the typical profile of an investor who has a large proportion of his wealth invested in Treasury bills?"

Explanation:

People engage in investments  in order to reap benefits in the future by sacrificing current consumption of the available money.

An investor refers to the person making  an investment. He/she always maximize the return based on  risk-taking capabilities. Investors are been categorized into risk takers based on their risk taking capabilities, these categories are: Risk averse and risk natural.

Those people who invest in safe investment options and reap low returns by taking least or no risk are known as risk averse investors. Therefore, risk investors, prefers securities like treasury bill for investment.

High liquidity, least risky, steady returns and short term maturity are the main treasury bill that attract  risk averse investors.

Thus, investors with least or no risk prefer treasury bills.

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