This is a graph of security market line with 4 portfolios.

This is a graph of security market line with 4 portfolios.

1a) Which of the following statements about Portfolio A are definitely true? Select all that apply. Portfolio A:

i. has a lower expected return than predicted.

ii. has a positive alpha.

iii. overpriced.

iv. is more risky than the market portfolio.

b)Which of the following statements about Portfolio B are definitely true? Select all that apply. Portfolio B:

i. is more risky than the market portfolio.

ii. is overpriced.

iii. has a positive alpha.

iv. None of the above.

c) Which of the following statements about Portfolio C are definitely true? Select all that apply. Portfolio C:

i. is underpriced.

ii. has an expected return higher than the risk-free rate.

iii. has a negative alpha.

iv. has less systematic risk than the market portfolio.

d) Which of the following statements about Portfolio D are definitely true? Select all that apply. Portfolio D:

Group of answer choices

i. falls below the Security Market Line.

ii. can be combined with portfolios A, B, and C to mimic the market portfolio.

iii. offers an expected return equal to the risk-free rate.

iv. is risk-free.

SELECT ALL THAT APPLY