Use the Following Two Statements to Answer This Question

Multiple Choice

Use the following two statements to answer this question:
I.In equilibrium, the expected return on all properly priced securities will lie on the SML.
II.Securities that are undervalued will lie below the SML.

A) I and II are correct.
B) I and II are incorrect.
C) I is correct, II is incorrect.
D) I is incorrect, II is correct.