Hugh Donovan is chief financial officer (CFO) of LightSpeed Connections (LSO, a rapidly growing U.S technology company with a traditional defined-benefit pension plan. Because of LSC's young workforce Donovan believes the pension plan has no liquidity needs and can thus invest aggressively to maxi returns. He also believes that U.S. Treasury bills and bonds, yielding 54 percent and 6.1 percent respectively, have no place in a portfolio with such a long time horizon. His strategy, w excellent returns for the past two years, has been to invest the portfolio as follows: 50 percent in a concentrated pool (15 to 20 stocks) of initial public offerings in technology and Internet companies, managed internally by Donovan mize hich has produced . 25 percent in a small-capitalization growth fund. 10 percent in a venture capital fund 10 percent in an S&P 500 index fund. 5 percent in an international equity fund. . Working with LSC's Investment Committee, the firm's president, Eileen Jeffries has produced a formal investment policy statement, which reads as follows The LSC obligations on an inflation-adjusted basis. The "time-to maturity" of the corporate workforce is a key element for any defined pension plan; given our young workforce, LSC's Plan has a long investment Pension Plan's return objective should focus on real total returns that will fund its long-term on and more time available for wealth compounding to occur. Therefore, the Plan can pursue an aggressive investment strategy and foeus on the higher return potential of capital growth. Under present U.S. tax laws, pension portfolio income and capital gains are not taxed. The portfolio should focus primarily on investments in businesses directly related to our main business to 1 everage our knowled ge base." A. Evaluate Donovan's investment strategy with respect to its effect on each of the following: i. ISC's pension plan beneficiaries. ii. Managing pension assets in relation to LSC's corporate strength B. Evaluate LSC's investment policy statement in the context of the following i. Return requirement ii. Risk tolerance . Time hor ii. Liquidity (Ctrp)