Question 12 2 pts You have identified that Portfolio A and B have the same beta but Portfolio A has a higher expected return than Portfolio B, i.e. Elra) > E[re) You would construct an arbitrage strategy by ____ and your profit would be ii Oi) buying Portfolio B and short-selling Portfolio A ii) Elra) - Elre) O buying Portfolio B and short-selling Portfolio A ii) Efre) - Eira) Oi) buying Portfolio A and short-selling Portfolio B ii) E(TA) - Eire) Oi) buying Portfolio A and short-selling Portfolio B ii) Efre) - Era) D Question 13 2 pts Which of the following is not true regarding the Security Market Line (SML)? Stocks with positive alpha will lie above SML The slope of SML is the market risk premium The intercept of SML is the risk-free rate O Fairly priced stocks will lie below SML O SML represents the mean return-beta relationship of CAPM