Consider the theory of active portfolio management based on Regression Analysis and Intercept/Var(ei) Ratio. Stocks A and B have the same positive intercepts and the same firm specific risk. Stock A has a higher beta than stock B. The model suggests that you should invest __________________.
a. equal proportions in stocks A and B
b. more in stock A than stock B
c. more in stock B than stock A
d. more information is needed to answer this question