Discuss the elements of Bookman’s analysis and the conclusions he will draw from it.\

Joe Bookman is a portfolio manager at State Tech University Foundation and is discussing the $900 million university endowment with the investment committee.
Exhibit 1 presents selected data on the current university endowment.

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EXHIBIT 1 Selected Data for State Tech University Endowment Asset Investment Allocation Class (% of portfolio) Semi- Liquid Liquid Illiquid Rebalancing Standard Deviation Band Policy of Returns (annual) Cash 1% 100% 0% 0% 0% - 15% 1.5% Fixed 24% 100% 0% 0% 20%-30% 5.9% Income Public 39% 50% 50% 0% 30%-40% 15.4% Equity Private 21% 0% 0% 100% 20%-25% 27.2% Equity Real 15% 0% 50% 50% 10% - 20% 11.7% Assets The university investment committee is performing its quarterly assessment and requests that Bookman review the rebalancing band policy.