You Are Considering Investing in One of Three Investments -

Multiple Choice

You are considering investing in one of three investments - A, B or C.When plotted against the CML, Investment A is below the CML line, Investment B is above the CML line and Investment C is right on the CML line.Which of the following statements is then true?

A) Investment A is the best investment because it will be underpriced in the market because it has a higher level of risk than the other investments
B) Investment B is the best investment because it is underpriced since the expected rate of return is less than the required rate of return
C) Investment C has identical expected and required rates of return so this investment is the most fairly priced
D) The question cannot be answered with the information given