Reference no: EM133070555
UMS, an elite private school in Texas, currently has an endowment of 1.7 billion dollars. The university has agreed to fund new academic initiatives over the next 10 years by taking a draw from the endowment at the end of each year, beginning one year from now (at the end of year 1). The university will calculate the amount of the draw using a formula based on the year-end value of the endowment. The table below summarizes how large a draw the university will take based on the endowment's year-end value.
|
Amount of Endowment (year-end)
|
Draw (%) of Endowment
|
|
0 - $1,500,000,000
|
0%
|
|
$1,500,000,000 - $2,000,000,000
|
1%
|
|
$2,000,000,000 - $2,500,000,000
|
2%
|
|
$2,500,000,000 -
|
3%
|
Assume the university has conservative investments with a mean annual (or one-year) return of 6% and a standard deviation of 5%, and assume future returns are normally distributed.
Based on a simulation model with N = 10,000 trials, answer the following questions:
a. What is the average endowment balance at the end of year 10, immediately after taking any final year-ending draw?
b. How many total dollars, on average, are drawn from the endowment over the ten-year period (include the final draw at the end of year 10)? Do not discount!
c. What is the probability that the final year's draw is at the maximum 3% level?
|
Standard deviation of the portfolio
: Suppose that you have a portfolio comprised of just two stocks (stock A and stock B). 15% of your money is in Stock A and 85% is in Stock B.
|
|
What would be the net income per year
: If sales were at 70% of the capacity and the variable costs decreased by 25%, what would be the net income per year
|
|
What the total present value of the three investments
: If the constant annual discount rate appropriate to all the payments is 6% per annum, what the total present value of the three investments
|
|
Total value of investment in selma change
: You own 8% or 75,000 shares of Selma, Inc. Your shares have a total market value of $1,200,000. By what percentage will the total value of your investment in Se
|
|
What is the average endowment balance
: UMS, an elite private school in Texas, currently has an endowment of 1.7 billion dollars. The university has agreed to fund new academic initiatives over the ne
|
|
Compute the irr of the project
: The mover's basic price is $50,000, and it will cost another $10,000 to modify it for special use by Ellis Construction. Compute the IRR of the project
|
|
Create all the relations in a MySQL database
: Create all the relations in a MySQL database. Consider each attribute in every table and make appropriate choices regarding data types & sizes
|
|
What is the current duration of instrument b
: 'Today is 1 July 2021. Joan has a portfolio which consists of two different types of financial instruments (henceforth referred to as instrument A and instrumen
|
|
Calculate the after tax operating cash flow
: The MacCauley Company has the following information available200 million in sales
|