NO.PZ202205190400000101
问题如下：
Q. Discuss the relevance of the endowment’s spending policy to Brodka’s expressed concerns.解释：
SolutionIn voicing his concerns, Brodka is cautioning that a higher allocation to illiquid investments may have adverse effects on the endowment’s spending rate and risk profile. Kemney University’s spending policy is an example of a geometric smoothing rule, sometimes called the Yale formula. It is intended to bring about a predictable pattern of distributions for better planning of resource deployment through its programs across varying conditions, even as extreme as the 2008 global financial crisis.
While this spending policy would be consistent with an investment objective of achieving long-term returns that support the spending rate while preserving the value of the endowment in real terms over time, the policy design also incorporates a smoothing, countercyclical element. This leads to lower spending rates in a period of sustained strong investment returns but higher spending rates in a protracted weak return environment.
按照公式，基金market value高的话，spending也会高，看上去是cyclical?
