for following four investment, which is not an appropriate for an endowment fund? a. small cap stocks b. real estate c. international equities d. municipal bonds I choose a. small cap stocks. how do you think? Thanks.
D… Endowments are tax exempt entities, so a tax-exempt yield would not be a good investment.
thanks. Could you please elaborate a little more? because endowments are tax exempt entities, so a tax-exempt yield disabled the benefit of tax-exempt status of endowment fund. on the contrary, other investment option gives higher yield, and those gain won’t subject to tax, which utilize the endowment fund’s tax-exempt feature… is my understanding right? Thanks. clipper1 Wrote: ------------------------------------------------------- > D… Endowments are tax exempt entities, so a > tax-exempt yield would not be a good investment.
also, endowments have above avg risk tolerance - so they would gravitate towards small cap, rela estate, international stocks etc