2. Consider the following four portfolios: Return over the year Beta one year ago 1.5 7.89% Portfolio A 2 4,69% Portfolio B 2.8 14.92% Portfolio C 6.25% .6 Portfolio D One year ago, risk-free rates were 2.5% and the expected return on the market was expected to be 10%. Instead the market only returned 7% over the year. You want to judge the quality of management only by the unsystematic portion of the unexpected return. Given this, how do you rank the portfolios (justify your answers quantitatively)? (15 pts) BEST WORST SECOND BEST THIRD BEST Given your performance, what is the probability over the next year that you will lose money (i.e., a return of less than 0%)? (5 pts) 2. Consider the following four portfolios: Return over the year Beta one year ago 1.5 7.89% Portfolio A 2 4,69% Portfolio B 2.8 14.92% Portfolio C 6.25% .6 Portfolio D One year ago, risk-free rates were 2.5% and the expected return on the market was expected to be 10%. Instead the market only returned 7% over the year. You want to judge the quality of management only by the unsystematic portion of the unexpected return. Given this, how do you rank the portfolios (justify your answers quantitatively)? (15 pts) BEST WORST SECOND BEST THIRD BEST Given your performance, what is the probability over the next year that you will lose money (i.e., a return of less than 0%)? (5 pts)