The Reward-To-Risk Ratio for Stock a Is Less Than the Reward-To-Risk

Multiple Choice

The reward-to-risk ratio for Stock A is less than the reward-to-risk ratio of Stock B. Stock A has a beta of .82 and Stock B has a beta of 1.29. This information implies that:

A) Stock A is riskier than Stock B and both stocks are fairly priced.
B) Stock A is less risky than Stock B and both stocks are fairly priced.
C) either Stock A is underpriced or Stock B is overpriced or both.
D) either Stock A is overpriced or Stock B is underpriced or both.
E) both Stock A and Stock B are correctly priced since Stock A is less risky than Stock B.