Assume that both X and Y are well-diversified portfolios and the risk-free rate is 3.0%. Portfolio X has an expected return of 13.5% and a beta of 1.2. Portfolio Y has an expected return of 10.5% and a beta of 0.7. In this situation, you would conclude that portfolios X and Y are in equilibrium offer an arbitrage opportunity are both underpriced are both fairly priced