0mm Inc., a biotechnology company, focuses on the discovery, development, and commercialization of DNA medicines to treat, cure, and protect people from diseases associated with human papillomavirus (HPV), cancer, and infectious diseases. Its Wimmunotherapy design _h_a_s__t_h___a_billtyto break the immune system's tolerance of cancerous cells and facilitate cross strain protection against unmatched and matched pathogens. The company is involved in conducting and planning clinical studies of its DNA medicines for HPVassociated precancers, including cervical, vulvar, and anal dysplasia; prostate cancer; HIV; Ebola; Middle East Respiratory Syndrome (MERS); Lassa fever; Zika virus; and the COVID-19 virus (coronavirus). The company has set up a foundation with a total of $50 million asset as of fiscal year end May 31, 20x2. The objective ofthe foundation is to promote the education on biology and biotechnology to elementary and high schools in the US, including educational course, summer research camp, _s__g_:__l_1__o_l_a_r_s___l_1__ip and financial aid, with a total annual operating budget of $2,520,000. The foundation has received a pledge of $100 million of the donations from a variety of donators for the next five years. The foundation has budgeted $8 million due on January 31, 20x3, representing the final payment for purchasing a new office building and conference center. The nominal inflation using 12-month selections of the BLS's Consumer Price Index (or CPI) is estimated to be 1.1% in the country. During the annual board meeting, the foundation's Investment Committee notes that the investment management fee paid to BIackRock Investment Capital is 1.3% per year. The committee has decided to review its IPS and recognizes that a revised asset allocation may be warranted. a. What is the foundation's required total rate of return? Please ignore the $100 million donation that has been pledged when estimating the return. b. Do you think the foundation is able to assume average risk, below average risk, or above average risk? Justify your answer with at least two reasons. c. Briefly discuss the tax constraint of the foundation. What does the foundation need to do _i__r_1___c_)__r_d_e_r__f_g_r_j it to enjoy a virtually taxexempt status