$P_t=\frac{\text{E}\text{x}\text{p}\text{e}\text{c}\text{t}\text{e}\text{d}\text{F}\text{u}\text{t}\text{u}\text{r}\text{e}\text{P}\text{a}\text{y}\text{o}\text{f}\text{f}}{1+E(r_{t+1})}$

$E(r_{t+1})=\frac{\text{E}\text{x}\text{p}\text{e}\text{c}\text{t}\text{e}\text{d}\text{F}\text{u}\text{t}\text{u}\text{r}\text{e}\text{P}\text{a}\text{y}\text{o}\text{f}\text{f}}{P_t}-1$

If you have two securities to invest in$,$ which one of the following is true?

Riskier security should have lower current price and lower discount rate.

Riskier security should be discounted less, thus giving them a higher expected return.

Riskier security should have higher current price and higher expected return.