QUESTION 2 Suppose a University has an endowment of 706 million dollars placed in a bank account earning a real rate of interest (nominal rate of interest - inflation) of 1% per year. What is the...


QUESTION 2<br>Suppose a University has an endowment of 706 million dollars placed in a bank account earning a real rate of interest (nominal rate<br>of interest - inflation) of 1% per year. What is the maximum amount of annual withdrawal a university can make to sustain the real<br>value of its endowment?<br>

Extracted text: QUESTION 2 Suppose a University has an endowment of 706 million dollars placed in a bank account earning a real rate of interest (nominal rate of interest - inflation) of 1% per year. What is the maximum amount of annual withdrawal a university can make to sustain the real value of its endowment?

Jun 06, 2022
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