Table below provides the information regarding the performance of a fund manager in recent month. The return and weight of each asset class in both managed portfolio and benchmark/bogey portfolios are presented respectively. Please show full workings in the space below.

	Portfolio Weight	Portfolio Return	Benchmark Weight	Benchmark Return
Stocks	0.60	5.60%	0.50	8.00%
Bonds	0.30	4.00%	0.40	3.80%
Cash	0.10	0.60%	0.10	0.60%

a)Calculate the returns of the managed portfolio and the return of the benchmark/bogey portfolio. Based on the excess return of the managed portfolio, did the fund manager perform well relative to the benchmark portfolio? (2 marks)

b)Before investing the fund, you would like to know more about the fund managers investment strategy. To obtain more information, you choose to use the Style analysis technique. Based on the regression output below for a range of asset classes, what is/are the major portfolio strategies of this fund? Please explain your answers. Do the asset allocation strategies explain majority of the return variabilities?

(4 marks)

Style Portfolio	Regression Coefficient	P-values
Small Cap	0.3967	0.2936
Medium Cap	0.4356	0.0043
Large Cap	0.1136	0.7865
Low Book-to-Market (Growth)	0.7131	0.0012
High Book-to-Market (Value)	0.1368	0.6141
R-square	0.3664