Question 3 from 2011 is an endowment where its spending rule is the same as the university’s requirement. The university needed like 37,500,000 and that was the same as the 5% spending rule times assets.
So in calculating liquidity, or even retutn requirement for that matter, lets assume that thee university needs:
- university spending needs are higher than spending rule
Im assuming we calculate liquidity as the masimum in spending and just don’t give the university what they need.
- This is a trickier situation:
What if the university needs say 3% of assets, but the spending rule is 5%,
Waht do we calculate for liquidity? University spending need or spending rule?
What about the return requirement? Its always based on spendind rule, right?