Your company uses a two-factor model to evaluate investment strategies. Expected returns and factor sensitivities of three portfolios are in Table 1. Table 2 shows factor forecasts and realized values Table 1: Fund 8 IC Expected Return 0.02 0.04 0.03 Inflation Factor Sensitivity 0.5 1.6 1.0 GDP growth Factor Sensitivity 1.0 0.0 1.1 Table 2: Factor Inflation Research Staff Forecast 2.0% Actual Value 2.246 1.0% GDP 1.5% You want to create a portfolio AC that invests 60% in Fund A and 40% in Fund 1. Given the surprises in inflation and GDP growth, the return for portfolio AC will be approximately: (select one answer from a) c)) 2. The surprise in which of the following had the greatest effect on fund returns (select one answer from do? a. 2.02% b.2.40% c. 4.989 d. Inflation on Fund B e. GDP Growth on Fund A DF. GDP growth on Fund