You are working as an investment adviser for a client who is planning to invest in a country named Costaguana. Short$-$dated government bonds in Costaguana offer a return of $0\mathrm{.}04.$ The average return on the stock market in Costaguana is $0\mathrm{.}1.$ The variance of this average stock market return is $0\mathrm{.}16.$ You are required to look at five Costaguanian companies as follows:

$$ The expected return for company A is $0\mathrm{.}1$

$$ The expected return for company B is $0\mathrm{.}07$

$$ The expected return for company C is $0\mathrm{.}13$

$$ The expected return for company D is $0\mathrm{.}16$

$$ The expected return for company E is $0\mathrm{.}01$

In your researches you discover that the covariance between the return achieved by company B over the last twenty years with the return on the market has been $0\mathrm{.}04$ and the covariance between the return achieved by company D with the return on the market over this period has been $0\mathrm{.}2.$ Your client suggests that these results mean that it would be a good idea to invest in these two companies. Explain why the results might lead her to think this and assess whether that argument is justified using recent models developed in asset pricing theory.