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. The reward-to-risk ratio for stock A exceeds the reward-to-risk ratio of stock B. Stock A has a beta of 1.4 and stock B has
. The reward-to-risk ratio for stock A exceeds the reward-to-risk ratio of stock B. Stock A has a beta of 1.4 and stock B has a beta of 0 .90. This information implies that:
A. both stock A and stock B are correctly priced since stock A is riskier than stock B.
B. either stock A is underpriced or stock B is overpriced or both.
C. either stock A is overpriced or stock B is underpriced or both.
D. stock A is riskier than stock B and both stocks are fairly priced.
E. stock A is less risky than stock B and both stocks are fairly priced
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