25. The following data has been collected to evaluate the following six funds. These are long-only equity funds and all funds hold well diversified equity portfolios. There are no minimum investment requirements for B and F funds, but all other funds are required to fully invest in the equity market. All these six funds have the same benchmark of market portfolio, M, with an annualized return of -8% and risk-free rate of 2% for the evaluation horizon in the last year. Fund A B D E F Alpha -0.01 0.01 -0.02 0.01 -0.02 0.05 Beta 1.02 0.02 0.70 0.99 -0.99 0.02 1) Why B fund has a low beta? Provide two possible explanations. 2) Circle the fund(s) which may use passive strategies(s) and provide your explanations. A B C D E F 3) Circle the fund which had the highest return in the last year. A B D E F 4) Please comment on the statement that "D has a higher beta compared with C, so D should have a higher return compared with C in the last year". Is this right? Why