genuinecfa
New member
- Jun 18, 2026
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Hey friends,
I went thru this example in CFAI curriculum.
The question mentions that CAS (City Arts School) has an endowment of $30mn and in its return objective intends to cover 1% inflation. The endowment has an annual operating budget of about 10mn of which 90% goes to salaries of staff. There is no mention about the schools revenue or cash flows and in solution for risk objective it says it has above average risk tolerance as endowment spending is not very large part of the schools annual budget. Is it 10mn/30mn - spending rate?
Please help
I went thru this example in CFAI curriculum.
The question mentions that CAS (City Arts School) has an endowment of $30mn and in its return objective intends to cover 1% inflation. The endowment has an annual operating budget of about 10mn of which 90% goes to salaries of staff. There is no mention about the schools revenue or cash flows and in solution for risk objective it says it has above average risk tolerance as endowment spending is not very large part of the schools annual budget. Is it 10mn/30mn - spending rate?
Please help