Based on Alpha in the CAPM being -0.49 and Alpha in 3 factor model being -0.72, if the alphas obtained across the two models are different, explain why the type of stocks Fund 1 is invested in causes the alpha to change when the fund is evaluated in a 3-Factor Model instead of a CAPM. Chose one answer from A-Q:

A.Alphas are identical in the 3-Factor Model and the CAPM.

B.Since Fund 1 has a tilt toward large-cap and growth stocks, the 3-Factor Model effectively lowers the benchmark for Fund 1 relative to the CAPM, thus lowering Fund 1's alpha in the 3-Factor Model.

C.Since Fund 1 has a tilt toward large-cap and growth stocks, the 3-Factor Model effectively lowers the benchmark for Fund 1 relative to the CAPM, thus raising Fund 1's alpha in the 3-Factor Model.

D.Since Fund 1 has a tilt toward large-cap and growth stocks, the 3-Factor Model effectively raises the benchmark for Fund 1 relative to the CAPM, thus lowering Fund 1's alpha in the 3-Factor Model.

E.Since Fund 1 has a tilt toward large-cap and growth stocks, the 3-Factor Model effectively raises the benchmark for Fund 1 relative to the CAPM, thus raising Fund 1's alpha in the 3-Factor Model.

F.Since Fund 1 has a tilt toward large-cap and value stocks, the 3-Factor Model effectively lowers the benchmark for Fund 1 relative to the CAPM, thus lowering Fund 1's alpha in the 3-Factor Model.

G.Since Fund 1 has a tilt toward large-cap and value stocks, the 3-Factor Model effectively lowers the benchmark for Fund 1 relative to the CAPM, thus raisingFund 1's alpha in the 3-Factor Model.

H.Since Fund 1 has a tilt toward large-cap and value stocks, the 3-Factor Model effectively raises the benchmark for Fund 1 relative to the CAPM, thus loweringFund 1's alpha in the 3-Factor Model.

I.Since Fund 1 has a tilt toward large-cap and value stocks, the 3-Factor Model effectively raises the benchmark for Fund 1 relative to the CAPM, thus raisingFund 1's alpha in the 3-Factor Model.

J.Since Fund 1 has a tilt toward small-cap and growth stocks, the 3-Factor Model effectively lowers the benchmark for Fund 1 relative to the CAPM, thus lowering Fund 1's alpha in the 3-Factor Model.

K.Since Fund 1 has a tilt toward small-cap and growth stocks, the 3-Factor Model effectively lowers the benchmark for Fund 1 relative to the CAPM, thus raisingFund 1's alpha in the 3-Factor Model.

L.Since Fund 1 has a tilt toward small-cap and growth stocks, the 3-Factor Model effectively raises the benchmark for Fund 1 relative to the CAPM, thus loweringFund 1's alpha in the 3-Factor Model.

M.Since Fund 1 has a tilt toward small-cap and growth stocks, the 3-Factor Model effectively raises the benchmark for Fund 1 relative to the CAPM, thus raisingFund 1's alpha in the 3-Factor Model.

N.Since Fund 1 has a tilt toward small-cap and value stocks, the 3-Factor Model effectively lowers the benchmark for Fund 1 relative to the CAPM, thus loweringFund 1's alpha in the 3-Factor Model.

O.Since Fund 1 has a tilt toward small-cap and value stocks, the 3-Factor Model effectively lowers the benchmark for Fund 1 relative to the CAPM, thus raisingFund 1's alpha in the 3-Factor Model.

P.Since Fund 1 has a tilt toward small-cap and value stocks, the 3-Factor Model effectively raises the benchmark for Fund 1 relative to the CAPM, thus loweringFund 1's alpha in the 3-Factor Model.

Q.Since Fund 1 has a tilt toward small-cap and value stocks, the 3-Factor Model effectively raises the benchmark for Fund 1 relative to the CAPM, thus raisingFund 1's alpha in the 3-Factor Model.