Kim Lee is the Chief Financial Officer for Beauty's Anonymous, a hypothetical private health care company that specializes in young adult beauty products and over the counter drugs. Triple A rated Jason & Company (JL) is purchasing the company for $500m. Kim Lee who has been with the company since inception owns 10% of the company and will be receiving $50m. The deal consists of $15m in JL stock (zero cost basis), $5m in JL 10 year bonds with a coupon of 3%, $30m cash. Kim Lee has worked 24/7 and knows very little about managing portfolios and needs your advice. Kim Lee is 62 years old, wants to retire and travel the world with her family. Before developing a plan she sends you the following information: Kim wants to establish a legacy foundation funded with $10m, utilizing the JL bonds, to support causes dear to her heart. The foundation must pay out 5% of market value every year. Kim wants to set up a $5m trust for her two college age twins. They will not be able to touch the principal for 20years and will receive the money when they turn 40. Kim wants to devise a strategy for the remainder of the assets ($35m) that generates a minimum $1m return to support her annual income needs. She believes the 10year treasury bond will be at a 5% yield to maturity in 3 years and believes inflation will accelerate to 4%/year. She has a long term time horizon and expects to live for another 30 years. She included information below with different asset classes with her view of their long term return and volatility profile.

The assets you can chose from have the following characteristics:

Asset Category	Projected Future Total Return	Current Annual Yield	Standard Deviation of Rreturn
US Equities	7.3%	2.0%	14.5%
Hedge Fund	3.5	0.0	9.5
International	8.0	3.5	16.5
Private equity	10.0	0.0	20.0
Municipal bonds	2.5	2.5	3.0
Real Estate	7.0	5.0	8.0
JNJ Stock	10.0	3.0	21.0

Required: You are to develop an investment plan for each of the three strategies, asset allocation must be chosen from the asset categories listed in the table above.