$25$

Multiple Choice $1\mathrm{.}5$ points

Consider the single factor APT. Portfolio A has a beta of $1\mathrm{.}3$ and an expected return of $21\%.$ Portfolio $0$ has a beta of $\mathrm{.}7$ and an expected return of $17\%.$ The risk$--$free rate of return is $8\%.$ If you wanted to take advantage of an arbitrage opportunity, you should take a short position in portfollo $$ and a long position in portfolio $$

B:B

A:A

B;A

A; B

ear my selection