Question: Assume the APT model has one risk factor (). Portfolio A is in equilibrium, it has a A=1.11 and an E(RA)=12%. Portfolio B is not

Assume the APT model has one risk factor (). Portfolio A is in equilibrium, it has a A=1.11 and an E(RA)=12%. Portfolio B is not in equilibrium, it has a B=1.11 and an E(RB)=7%. Portfolio B is and one should short and go long in A. undervalued; Portfolio A; Portiolio B B. overvalued; Portfolio B; Portfolio A C. undervalued; Portfolio B; Portfolio A D. none of the answers listed here

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