$3$

Multiple Cholce

$1$ point

Consider a single factor APT. Portfolio A has a beta of $2\mathrm{.}0$ and an expected return of $22\%.$ Portfolio $B$ has a beta of $1\mathrm{.}5$ and an expected retum of $17\%.$ The risk$-$free rate of return is $4\%.$ If you wanted to take advantage of an arbiltrage opportunity, you should take a short position in portfolio

$q,$ and a long position in portfolio

A; B

B; B

B; A

A; the riskless asset

A: A