Imposing the No-Arbitrage Condition on a Single-Factor Security Market Implies

Multiple Choice

Imposing the no-arbitrage condition on a single-factor security market implies which of the following statements? I) The expected return-beta relationship is maintained for all but a small number of well-diversified portfolios.
II) The expected return-beta relationship is maintained for all well-diversified portfolios.
III) The expected return-beta relationship is maintained for all but a small number of individual securities.
IV) The expected return-beta relationship is maintained for all individual securities.

A) I and III
B) I and IV
C) II and III
D) II and IV