Endowment IPS - blue box: Example 13 - CAS school

CFA Level III
#1

Hi everyone,

I have a question regarding the above example. I don’t understand how, in the risk objective answer, we can say that the endowment spending is 14% of the CAS revenues.

Where shall we have found this information?

Thank you in advance,

Paolo

#2

Ciao Paolo,

spending of 4.5% X 30M = 1.350M which is less than 14% of the annual budget (10M X 0,14 =1.4M)

or at least that’s how I see it.

Hope it helps,

Ciao