Tobin's theory 2

Therefore if the individual holds all wealth (W) in money and none
in bonds, the portfolio would have zero expected returns and zero
risk (refer to the diagram). As the proportion of bonds increases,
expected portfolio returns and risk both rise. The terms on which
the individual investor can increase the expected return on the
portfolio (Ye) at the cost of increasing risk (Rw) is represented
by the line C.

By holding more bonds
a person increases his expected returns and also his risk.

Higher levels of risk is associated with higher proportions of bonds
in the portfolio.