Attached is a question is from the 2006 CFA level II/III exam on an IPS case. Please give correct answers and a brief explanation. The attached case is vague and I am struggling to comprehend

Rodolfo Serra is a professional soccer player with FA Milan, a leading soccer team in Italy's Series A league. He has been well paid over his career including an initial, one-time signing bonus of 2 million, which he immediately invested in a start-up company designing training equipment. This aggressive venture eventually went bankrupt. At 34 years old, Serra is now at his professional peak with an annual pre-tax salary of 5 million: 4 million paid throughout the year and a 1 million year-end bonus. His salary is taxed at 40 percent. Since the beginning of his career Serra has managed his own investments. He has had mixed results in his growth equity portfolio. One of his worst performing equity holdings is B&K, an investment he initially made three years ago. On several occasions, in reaction to an extended decline in B&K's share price, Serra used a portion of his year-end bonus to acquire additional shares in an effort to lower his average cost per share. He avoids the technology sector after incurring severe investment losses in the late 1990's. The remainder of his growth equity portfolio has performed satisfactorily. He also has commercial real estate investments that are expected to be cash-flow neutral this year. A summary of his assets is shown in Exhibit 1. Exhibit 1: Rodolfo Serra: Personal Assets (all amounts in ) Cash savings 4,000,000 Growth equity portfolio* 40,000,000 Commercial real estate investments 14,000,000 * All dividends are reinvested Serra expects the annual after-tax interest income on his cash savings to be 100,000 at the end of the year. Serra will retire from professional soccer one year from now at the age of 35. He will pay cash for a personal home costing 4.5 million when he receives his year-end bonus. Having grown up in poverty, Serra recently established a children's welfare foundation. He will legally gift all his commercial real estate investments to the foundation upon his retirement. After retirement, Serra intends to volunteer all of his time to the foundation and does not expect to receive any compensation from other sources. Serra has been divorced for two years and has a 7-year-old son who lives with his mother in Italy. He makes annual family support payments amounting to 800,000. The annual family support payments will stop when his son reaches age 18. Serra's living expenses are expected to be 1.2 million this year. Both family support payments and living expenses will grow at an average annual inflation rate of 4 percent. All income net of expenses is currently reinvested in his growth equity portfolio. Serra has expressed his desire to maintain the real value of his portfolio during retirement, which is expected to last a minimum of 40 years. Serra recently hired a portfolio manager, Patrick Schneider, CFA, who expects the after-tax nominal annual return for growth equity to be 8.5 percent. 1. Formulate the return objective in Serra's investment policy statement. (2 points) Note: Assume there are no tax benefits or tax liabilities related to Serra's gifting commercial real estate, or paying family support and living expenses. 2. Identify two factors in Serra's personal situation that increase his ability to take risk. (2 points) 3. Identify two factors in Serra's personal situation that decrease his ability to take risk. (2 points) 4. Judge, considering all factors, whether Serra has below-average, average, or above-average ability to take risk. (1 point) 5. Formulate each of the following constraints in Serra's investment policy statement. Support each response with one reason based on Serra's specific circumstances. i. Liquidity requirement (1 point) ii. Time horizon (2 points)