Stock A has a beta of 1.5 and Stock B has a beta of 0.5. Which of the following statements must be true about these securities? (Assume the market is in equilibrium.)

Select one:

a. When held in isolation, Stock A has more risk than Stock B.

b. Stock B would be a more desirable addition to a portfolio than Stock A.

c. Stock A would be a more desirable addition to a portfolio than Stock B.

d. In equilibrium, the expected return on Stock A will be greater than that on Stock B.

e. In equilibrium, the expected return on Stock B will be greater than that on Stock A.