A university Endowment Fund is evaluated using Top-Down and Bottom-Up analysis, and against a 40:60 (Bonds:Equity) benchmark. The evaluation used the Fund and Benchmark performance over a 1-year period and the results are provided below in annualised terms. Excess Returns and Volatility: Average Excess returns above Volatility risk free Fund 14.3% 25.6% Benchmark 12.9% 16.9% Regression of weekly excess fund returns (Fund return - risk free return) regressed against excess benchmark returns (benchmark return - risk free return) are presented below: Standard Standard error Standard Error Alpha Beta Deviation (Alpha) (Beta) (Errors) Fund -1.27% 0.95% 1.7 4.65% 19% Bottom-Up Attribution Analysis Results Selection Effect = -1.1% Allocation Effect = 2.5%. You are required to: a) ( 2 marks) Explain why the Top-Down alpha does not equal the over/under performance of the Endowment fund through Bottom-up analysis. b) (2 marks) Explain if the Endowment Fund's portfolio manager has skills to outperform the benchmark consistently in the future? (You can use 1.96 as the 95% two-tail T-statistic for your answer. T-statistics for Alpha = Alpha/Standard Error of Alpha) c) (2 marks) Given all the information above, what do you think is the defense:growth (Bonds:Equity) bias of the Endowment fund. Provide justification to support your