An analyst is taking action to lower the market risk of the portfolio shown below. Which action would lead to a portfolio with the least amount of market risk?

U.S. Treasury security: $20,000

Stock #1 with a Beta of 1.0 valued at $10,000

Stock #2 with a Beta of 2.5 valued at $10,000

Stock #3 with a Beta of 1.5 valued at $10,000

Group of answer choices

Sell Stock #3 and Stock #2 and reinvest the proceeds in Stock #1.

Sell Stock #2 and reinvest the proceeds in Treasury securities.

Sell Stock #1 and purchase more of Stock #2.

Sell the U.S. Treasury security and reinvest the proceeds in Stock #1.