26

Four fund managers are comparing their performance in 2019. The returns generated by their respective portfolios and beta values are given below. Manager 1: Return = 18.5%; Beta = 1.5 Manager 2: Return = 12%; Beta = 0.80 Manager 3: Return = 15%; Beta = 1.1 Manager 4: Return = 16%; Beta = 1.4 The risk-free rate was 4% in 2019 and the return on the market portfolio was 13%. Which manager is the best selector of individual securities (aside from the issue of general movements in th market)? Select one: a. Manager 4 O b. Manager 1 O c. None of them. d. Manager 2 O e. Manager 3