You have been asked to manage a $3 million university endowment fund, which is used to fund the additional salary stipend for 5 endowed chair positions. The stipend for each chair is $30,000 (for a total of $150,000). What type of assets would you recommend for this portfolio? Why? As a portfolio manager you must develop policies to meet the fund’s objectives and constraints. Describe the policies you would recommend for asset allocation, the security selection process, liquidity issues, risk positioning, diversification, income generation and tax consequences of your portfolio. [Make sure you provide explanations for your answers.] Build a spreadsheet to document the feasibility of your recommendation.

Answer rating: 100% (QA)

Asset Allocation As the endowment fund is required to provide a consistent stream of income to fund the endowed chair positions the primary objective would be to generate sufficient income to cover th... View the full answer