1.You estimate that Walmart's reward-to-risk ratio is less than the reward-to-risk ratio of Target. If Walmart has a beta of 0.77 and Target has a beta of 1.38, you would conclude that:

Walmart is less risky than Target and both stocks are fairly priced.

Walmart is riskier than Target and both stocks are fairly priced.

Either Walmart is overpriced or Target is underpriced or both.

Either Walmart is underpriced or Target is overpriced or both.

BothWalmart and Target are correctly priced since stock A is riskier than stock B.