Imposing the no$-$arbitrage condition on a single$-$factor security market implies which of the

following statements?

$1.$ The expected return$-$beta relationship is maintained for all but a small number of well$-$

diversified portfolios.

$2.3.$ The expected return$-$beta relationship is maintained for all well$-$diversified portfolios.

The expected return$-$beta relationship is maintained for all but a small number of

individual securities$.$

$4.$ The expected return$-$beta relationship is maintained for all individual securities$.$

A$)$ II and III

B$)$ Only I is correct.

C$)$ I and IV

D$)$ I and III

E$)$ II and IV