Annualised average return, volatility and correlation using monthly returns over a 20 year period using monthly returns of the three assets are presented below: You are asked for your explanation of the assets used and advice on the SAA construction process. Question 2 a) (1.5 marks): The SAA has a 40:60 moderate growth bias and the portfolio management team has recommended a 40:40:20 [Asset 1:Asset 2:Asset 3] allocation. What has been the average return on this portfolio over the the period of evaluation? b) (3.5 marks): 40% allocation must be to defensive, assets that have low volatility and low returns comparted with growth assets. Based on your understanding of defensive assets, that come with lower risk and are expected to provide lower returns, explain why these investments provide lower returns? Use an example of the risks in holding debt to a firm to help demonstrate your answer. Annualised average return, volatility and correlation using monthly returns over a 20 year period using monthly returns of the three assets are presented below: You are asked for your explanation of the assets used and advice on the SAA construction process. Question 2 a) (1.5 marks): The SAA has a 40:60 moderate growth bias and the portfolio management team has recommended a 40:40:20 [Asset 1:Asset 2:Asset 3] allocation. What has been the average return on this portfolio over the the period of evaluation? b) (3.5 marks): 40% allocation must be to defensive, assets that have low volatility and low returns comparted with growth assets. Based on your understanding of defensive assets, that come with lower risk and are expected to provide lower returns, explain why these investments provide lower returns? Use an example of the risks in holding debt to a firm to help demonstrate your