Choosing One Portfolio. The following table shows your predictions of the future returns on three mutual funds. Treasury Bills currently earn 4%. To invest all your wealth, you are limited to choosing a portfolio of only one of these three funds along with T-Bills. You are risk averse and able to borrow and short-sell. Which one of the three risky funds do you choose to invest in. Simple calculations or a graph may be helpful to illustrate your choices.
Compare Fund A to Fund B. Which do you prefer? Explain.

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T-Bills Fund B Fund C Fund A E[rp] 16% 10% 4% 16% брбр 20% 25% 12% BPBP .90 1.00 0.60