Four fund managers are comparing their performance in 2019. The returns generated by their respective portfolios and their beta values are given below.

The risk-free rate was 4% in 2019 and the return on the market portfolio was 10%. Which manager is the best selector of individual securities (aside from the issue of general movements in the market)?

Select one:

Manager 1

Manager 2

Manager 3

Manager 4

None of them

Manager 1: Return = 8.5%; Beta = 0.65 Manager 2: Return = 12%; Beta=0.90 Manager 3: Return = 9.5%; Beta = 0.80 Manager 4: Return = 14%; Beta = 1.20