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2) An investment advisor is comparing performance of two mutual funds each of which is designed to outperform the S&P 500. The Freedelity Fund returned

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2) An investment advisor is comparing performance of two mutual funds each of which is designed to outperform the S&P 500. The Freedelity Fund returned 19% The JPStanley Fund returned 16%. The betas of the Freedelity & JPStanley funds are 1.5 & 1.0 respectively. T-Bill rate = 6%; and the S&P 500 returned 14%. Which fund was the superior performer? Why? (10 Points)

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