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X and Y are well diversified portfolios in an economy where the risk-free rate is 8%. The following details are known about X and Y

PortfolioExpected returnBetaX16%1.0Y12%0.25

We can conclude that portfolios X and Y ___________

Offer an arbitrage opportunity
Are in equilibrium
Are both fairly priced
Are both underpriced
None of the above

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