Jarvis University (JU) is a private, multi-program U.S University with a $2billion endowment fund. JU is heavily dependent on its endowment fund to support ongoing expenditures. The endowment fund must make $126 million annual contribution, which is indexed to U.S education cost inflation index (which is at 3%). The endowment fund has also budgeted $200 million to construct a new library.

(i) What is JU required return?

(ii) What is JU’s risk tolerance?

(iii) Outline JUs five constraints

Answer rating: 100% (QA)

i The required return for JU is the return that the endowment fund must earn in order to meet its obligations The required return is determined by the ... View the full answer