Harvard case essay

Treasury bonds with the same maturity. The deference between selling TIPS and buying T-bonds will cover the Inflation risk losses thus effectively eliminates Inflation risk In the portfolio. The Harvard’s Policy Portfolio Includes much of the university endowment, pension assets, working capital, and portfolio contains 1 1 wide asset classes, Including domestic equity, foreign equity, private equity, domestic bonds, foreign bonds, emerging markets, real estate, commodities, absolute return, high yield, and cash.
This portfolio was determined by the board of the corporation for the long-run allocation, however, the manager can make short-run adjustment within the limits from the guideline. The reason that HAMS focus on real returns is HAMS want to exclude the influence of inflation and determine the return rate more precisely. As the formula nominal return = real return + inflation rate shows, choosing real return instead of nominal return can reveal the real purchasing power of the investment, thus help the manager to conduct more efficiently to prevent the evasion of the investment.
As we can see from Exhibit land Exhibit 2, domestic and foreign equity constitute the biggest part of the portfolio, and these two asset classes have high real returns as well as latterly larger standard deviations. And we know that equity premium indicates the difference between the expected return on the market portfolio of common stocks and the risk-free interest rate, and higher risk often indicates higher equity premium.

Based on Ham’s assumption that the real growth rate of annual spending is 3% after inflation, and that gifts to the endowment are same as the historical average rate (1%), HIM has to maintain a real between 6% and 7% of the total investment In order achieve its preservation goal. Thus HIM has to invest a large portion in US and reign equity with higher premium, resulting in a short of cash. Yes, From inception in 1 997, TIPS had offered a real yield that ranged from. 2% to 4. 25%.

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more