In 2013 AM, 6C, correct solution states that investable assets need to be reduced by 3M USD outflow at the beginning of the year but the inflow coming from the founder in the amount of 2M USD is not calculated towards investable assets even though the inflow occurred also at the beginning of the year. It kind of confuses me because why would a portfolio manager not use these assets (2M EUR) to generate returns but use it for liquidity purposes?
Any ideas?
the 2m contribution will happen starting the following year
Ahh…it seems that I missed the crucial info from the vignette “annual contributions from the Foundation to the university will be used to cover a portion of the university’s operating expenses.” In other words, it wil not be a part of investable assets.