In the 2013 AM Mock, question #1, why did they ignore the 250k cash reserve specified in the question? it specifically states, “Their goals are to grow the asset base of the portfolio over time to maintain its after-tax purchasing power and to establish and maintain a cash reserve of USD 250,000.” that would lead me to believe the 250k should be excluded from investable base…
If you look at next page of the answer file there is an alternative answer, describing exactly what you said.
So, your answer is accepted.
Look at the alternate answer… they removed the 250,000
ah, thank you for that. why is it even an option to not include the 250k in the analysis?? that makes no sense!
because it’s unclear if the cash reserve should be established current or include it in return and then establish it.