According to the capital asset pricing model, which of the following will increase the expected rate of return on a security that has a beta that is less than that of the market? Assume the market rate of return is greater than the risk-free rate and both rates are positive. (Which ines apply)

I. decrease in the risk-free rate II. increase in the risk-free rate III. increase in the market risk premium IV. decrease in the market rate of return

Answer choices:

II and III only II and IV only I and III only II, III, and IV only I and IV only