返回列表 发帖

Reading 28:Managing Institutional Investor Portfolios- LO

 

Q25. Erica Turner is a trustee of the Turner Endowment Fund at Newsome College. The fund provides scholarships to students that demonstrate high achievement in the classroom that went to high school in Mississippi. The endowment has assets of $4 million. As the founder of the endowment, Turner would like to insure that at least 10 tuition scholarships are offered annually. Tuition at Newsome College is $18,000 annually, and expected to increase by 4% long-term. Inflation is expected to be 2% into the foreseeable future.

Because Turner is an investment professional, she volunteered to evaluate potential investment policies for the endowment.

Proposed Plan

A

B

C

D

Return Requirement

Endowment objective is to outperform relevant benchmark by 100 bps

Match relevant benchmarks

11%

9%

Risk Tolerance

Very high

Moderate

Low

Very Low

Time Horizon

Infinite

Annual

Turner’s lifetime

4 years

Liquidity

Very high

Low

High

Moderate

Tax Limitations

None

Tax Exempt

Munis

Unrelated Business Income Tax (UBIT)

Regulatory & Legal

ERISA

None

Very Few

Eligible Investments

Unique Circumstances

Not applicable to endowments

Structure of board

Asset/Liability matching

Financial status of college

The current asset allocation of the Turner Endowment for Newsome College is shown below:

Asset Allocation

 

Current Allocation

Expected Return

Expected Standard Deviation

Treasury bills (t-bills)

11%

2%

0%

Intermediate bonds

30%

7%

12%

Long-term bonds

14%

9%

15%

High yield bonds

5%

10%

18%

Large cap stocks

20%

12%

20%

Small cap stocks

20%

15%

30%

 

100%

 

 

Based on Turner’s wishes for the endowment, what college spending rule would best suit her specific needs?

A)  Rolling 3-year average spending.

B) Inflation plus.

C) Geometric spending.

 

Q26. Based on the information provided above, which policy statement has the appropriate language for the endowment’s investment policy statement with respect to liquidity?

A)   Plan C.

B)   Plan D.

C)   Plan B.

 

[此贴子已经被作者于2009-3-5 11:19:56编辑过]

a

TOP

 s

TOP

 r

TOP

thanks

TOP

ok

TOP

踩踩踩踩踩踩才

TOP

V

TOP

K

TOP

回复:(wzaina)[2009] Session 5 - Reading 21: Man...

Thanks.

TOP

返回列表