Refer to the Graph

Refer to the graph. If a financial asset's average expected rate of return and beta put it at point F,

A) arbitrage will push down the price of the asset and lower the average expected rate of return to Y.
B) arbitrage will push up the price of the asset and lower the average expected rate of return to Y.
C) a restrictive monetary policy is needed to move the asset onto the Security Market Line.
D) an expansionary monetary policy is needed to move the asset onto the Security Market Line.

Correct Answer:

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