Stock A has a level of systematic risk, Beta_A = 1.5, and statistics show that the expected return on the market portfolio is 12% and the risk-free rate is 4%. "A" has an observed rate of return of 12%.

Which of the following statements are true regarding A

I Its Treynor ratio is lower than Treynors ratio for M

II It will be sold in the market to restore equilibrium

III It will have a lower Sharpe ratio than M

a.) I only

b.) II only

c.) I, II, and III

d.) I and II only

e.) III