The risk-free rate, average returns, standard deviations, and betas for three funds and the S&P 500 are given below.

Fund Avg Std Dev Beta

A 15.0 % 31.0 % 1.05

B 19.5 % 35.5 % 1.30

C 16.5 % 26.5 % 1.10

S&P 500 12 % 20 % 1

rf 6.0 %

If these portfolios are subcomponents that make up part of a well-diversified portfolio, then portfolio ______ is preferred.

A. B

B. C

C. A

D. S&P 500