Suppose that the risk-free rate is 5.5 percent, the return over a three-year period for each portfolio matches its expected return, and the portfolios have 3-year annual return standard deviations as follows:

Portfolio 1 22%

Portfolio 2 26%

Portfolio 3 18%

If you were restricted to selecting one of the three portfolios to invest all your money in, which should you choose based on that portfolio having the best ratio of excess return per unit of total risk as measured by its Sharpe ratio?

Portfilio 1
Security	Amount Invested	Expected Return	Beta
Security A	$4000	9%	.80
Security B	$5000	12%	1.15
Security C	$12000	14%	.95
Security D	$8000	15%	1.23
Portfolio 2
Security A	$3000	16%	1.22
Security B	$11000	13%	1.54
Security C	$9000	8%	.87
Security D	$6000	11%	.81
Portfolio 3
Security A	$15000	10%	1.72
Security B	$12000	9%	.81
Security C	$3000	12%	.72
Security D	$2000	15%	1.54

Portfilio 1
Security	Amount Invested	Expected Return	Beta
Security A	$4000	9%	.80
Security B	$5000	12%	1.15
Security C	$12000	14%	.95
Security D	$8000	15%	1.23
Portfolio 2
Security A	$3000	16%	1.22
Security B	$11000	13%	1.54
Security C	$9000	8%	.87
Security D	$6000	11%	.81
Portfolio 3
Security A	$15000	10%	1.72
Security B	$12000	9%	.81
Security C	$3000	12%	.72
Security D	$2000	15%	1.54