Question $33(2\mathrm{.}5$ points$)$

$$

Saved

Stock A$\text{'}$s beta is $1\mathrm{.}7$ and Stock B$\text{'}$s beta is $0\mathrm{.}7.$ Which of the following statements must be true, assuming the CAPM is correct.

Question $33$ options:

Stock A would be a more desirable addition to a portfolio then Stock B$.$

Stock B would be a more desirable addition to a portfolio than A$.$

In equilibrium, the expected return on Stock B will be greater than that on Stock A$.$

In equilibrium, the expected return on Stock A will be greater than that on B$.$

When held in isolation, Stock A has more risk than Stock B$.$