Saved Help Save & Exit Submit Consider two well-diversified portfolios: Portfolio 1 has an expected return of 12%, and a beta of 2.25, while Portfolio 2 has an expected return of 10% and a beta of 1.25. If the risk-free rate is 2%, which portfolio would be preferred and why? Multiple Choice Portfolio 1 because it has the higher expected return MTE Portfolio 1 because it has the higher risk premium. 6 CUID Portfolio 2 because it has the higher reward-to-risk ratio. lost KIN Portfolio 2 because it has the lower risk. Next Prev 8 of 25