Finance/Accounting Please Help Endowment Analysis There is no minimum or maximum

Question

Finance/Accounting Please Help

Endowment Analysis

There is no minimum or maximum length answer required but be sure to provide all of the requested elements for each of the four parts within the allotted time Given your expertise in investment management, GIT's student newspaper, the Polytechnic ("Poly"), has asked you to analyze and make recommendations regarding the university's endowment assets. Below is the actual statement of investments from the 2017 GITfinancial statements. A definition of each asset category is included at the end of this examination. 5.Investments The Institute's investments are overseen by the Investment Committee of the Board of Trustees The fair value and cost of investments at June 30 is as follows 2017 2016 Fair Value Cost Fair Value Cost Cash and cash equivalents Fixed income Domestic equity Global equity Foreign equity Real assets Marketable alternatives S 22,598 $ 22,598$ 36,338 S 69,695 126,327 53,211 126,516 4,287 68,742 124,404 38,028 99,206 4,115 82,368 80,253 64,429 70,735 3,186 36,338 79,445 75,983 53,350 61,625 2,873 Fixed income Multi strategy Equity 33,098 9,634 16,677 25,764 8.368 14,737 28,363 28,479 13,393 18,864 16,392 15,179 Private investments Fixed income Real assets Equity 6,518 57,606 93,804 619,971 10,179 104,427 64,921 585,489 7,623 65,438 99.346 579,951 10,179 110,382 69,730 550,340 Subtotal

Explanation / Answer

the portfolio should include various asset classes:on the basis of manager selection/portfolio monitoring/asset allocation we create a porfolio:

cash and cash equivalents

since the dimestic equity has increased from 75983 to 124404. we shall include domestic equity in the porfolio.

next let us add the foreign equity and real assets.since appreciation has been recorder in these asset classes.

real assets bring about a stable cash flow,and considerable appreciation potential is possible with real assets,

and a hedge against inflation.

fixed income is included in the portfilio of poeple who are risk averse and do noy have the potential to take risks.

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