Question 2 (Endowment) SU is a private university with a $2 billion endowment fund as of fiscal year-end 31 Dec 2004. With little government support, SU is heavily dependent on its endowment fund to support ongoing expenditures, especially because the universitys enrolment growth and tuition revenue have not met expectations in recent years. The endowment fund must make a $126 million annual contribution to 3 SUs general operating budget. The Consumer Price Index is expected to rise 3 percent annually and the higher education cost index is anticipated to rise 5 percent annually. In a recent capital campaign, SU only met its fundraising goal with the help of one very successful alumna, who donated $400 million of BB Oil and Gas common stock at fiscal year-end 31 Dec 2004. BB Oil and Gas is a large-capitalization publicly traded company. The alumna donated the stock on the condition that no more than 25 percent of the initial number of shares may be sold in any fiscal year. No substantial donations are expected in the future. Given the large contributions to and distributions from the endowment funds Investment Committee has decided to revise the funds investment policy statement. Prepare the components of an appropriate investment policy statement for SUs endowment fund as of 1 January 2005, based only on the information given. Formulate an IPS for S