Question
Jarvis University (JU) is a private, multi-program U.S University with a $2billion endowment fund. JU is heavily dependent on its endowment fund to support ongoing
Jarvis University (JU) is a private, multi-program U.S University with a $2billion endowment fund. JU is heavily dependent on its endowment fund to support ongoing expenditures. The endowment fund must make $126 million annual contribution, which is indexed to U.S education cost inflation index (which is at 3%). The endowment fund has also budgeted $200 million to construct a new library.
(i) What is JU required return?
(ii) What is JU’s risk tolerance?
(iii) Outline JUs five constraints
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i The required return for JU is the return that the endowment fund must earn in order to meet its obligations The required return is determined by the ...
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Investments
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
10th edition
77861671, 978-0077861674
