A Strategic Asset Allocation (SAA) for an Endowment has been created and consists of 40% allocation to the domestic bond market and 60% allocation to the domestic equity market. Based on historical 20 year data, the average volatility and return for the two asset classes and the SAA are as follows (all figures have been annualized and in real terms): Bonds Equities SAA Returns 1.5% 8.3% 5.58% Volatility 2.2% 13.7% 9.5% The Endowment has a required real return of 5.5% per annum, which includes 4% for an annual spend (on operations), 0.5% for management fee and 1% increase in the real value of the fund. The risk objective requires the volatility below 10% per annum. Which of the following statements is incorrect? The portfolio will be able to achieve its investment objectives each year. The investor should consider downside risk measures to better understand the suitability of the portfolio for their investment needs. Average historical returns are not reflective of the expected future annual returns The portfolio generated returns higher than the required returns in some years, and lower than the required returns in other years. The portfolio may not achieve its investment objectives each year