Question: Assume the APT model has one risk factor (). Portfolio A is in equilibrium, it has a = 1.1 and an E(RA) = 10%. Portfolio

Assume the APT model has one risk factor (). Portfolio A is in equilibrium, it has a = 1.1 and an E(RA) = 10%. Portfolio B is not in equilibrium, it has a = 1.1 and an E(RB) = 17%. Portfolio B is ___________ and one should short _____________ and go long in _____________. A. undervalued; Portfolio A; Portfolio B B. none of the answers listed here C. undervalued; Portfolio B; Portfolio A D. overvalued; Portfolio B; Portfolio A

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