Which of the following describes a portfolio that plots below the security market line?

A) The security is undervalued.
B) The security is providing a return that is greater than expected.
C) The security's reward to risk ratio is too low.
D) The security's beta is too low.
E) The security provides a return that exceeds the average return on the market.

Security Market Line

A representation in the Capital Asset Pricing Model (CAPM) showing the expected return of a security or portfolio in relation to its risk (beta).

Reward to Risk Ratio

A metric utilized by investors for comparing the anticipated gains from an investment against the risk incurred to attain those gains.

Beta

An indicator of the level of systematic risk or volatility of a security or a portfolio relative to the entire market.