2013 AM Exam Question 6 - Foundations

hei.so

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Regarding question 6D:
I don’t understand why there is no change to the return objective. Should it not increase to preserve purchasing power? My justification was correct but I wrote “increase” instead.
So basically the guy starts a foundation with $100MM. Annual contributions are $2MM. Three years later, the company goes bankrupt. Contributions stop.
 
I think you confused return objective with return requirement. The return objective is always to meet the spending needs on an inflation adjusted basis.
 
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