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You work as an investment actuary for a large insurer whose pension funds are externally managed by a third-party fund manager. One of the funds involved is Fund XYZ which had a value on 1st January 2020 of €10m. On 30th April 2020 the value of the fund had fallen to €8.5m. On 1st May 2020 the fund received a contribution of €7.5m and paid out a benefit of €2m. On 31st December the fund had a value of €17.1m. The fund managers have written the following memo to you: We note that no cash bonus was paid to us due to the performance of Fund XYZ in 2020. This clearly is a mistake since we were told in our contract that the bonus would be paid if the fund out-performed a benchmark return of 5% p.a. which clearly is has done by our own calculations here. Can you clarify what has happened for us in regards to this issue? Carry out the relevant calculations to investigate this matter further and then draft a business memo (max. half of an A4 page and using Word) to the fund managers explaining your calculations and giving your opinion on the matter. Marks will be deducted if your reply is overly technical and contains too much buzzwords and jargon! No marks will be given if the memo is hand-written or e-pen written.