You Are Given Three Investments with the Same Level of Risk

question 20

Multiple Choice

You are given three investments with the same level of risk. Two of the investments have relatively the same level of return. The third investment has a return that is relatively higher than the other two investments. Assuming that the two investments with the same level of return lie on the SML, how would you classify the third investment?

• A) ``Over-sold``, investors rush to buy it
• B) ``Over-bought``, investors rush to sell it
• C) ``Over-sold``, investors rush to sell it
• D) ``Over-bought``, investors rush to buy it

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