Imposing the no-arbitrage condition on a single-factor securities market implies which of the following statements?

I) The relationship between expected return and beta holds for all but a few well-diversified portfolios.

II) The relationship between expected return and beta is maintained for all well-diversified portfolios.

III) The expected return-beta relationship is maintained for all but a few individual securities.

IV) The relationship between expected return and beta is maintained for all individual securities.

Question 2 options:

I and III

I and IV

II and III

II and IV

Only I is correct.