(16) According to CAPM. in equilibrium all individual risky securities' expected returns must lie on A. the capital allocation line B. the security market line C. the efficient frontier D. none of the above (17) Consider a two-factor asset pricing model. Portfolio A has a beta of 1 on factor one and a beta of 2 on factor two. The risk premiums on the factor one and two portfolios are 4% and 5%, respectively. The risk-free rate of return is 2%. The expected return on portfolio A is according to this model. A. 10% B. 14% C. 16% D. None of the above (18) The risk-free rate is 4%. The expected market rate of return is 11%. If you expect stock X with a beta of 0.8 to offer a rate of return of 12% via your fundamental analysis, then you should according to CAPM. A. buy stock X because it is overpriced B. buy stock X because it is underpriced C. sell short stock X because it is overpriced D. sell short stock X because it is underpriced