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Arbor City Community Foundation (B): Managing Good Fortune Case Solution & Answer

This Case is about FINANCIAL MANAGEMENT

PUBLICATION DATE: November 01, 2011 PRODUCT #: KEL586-HCB-ENG

The vision of the ACCF was to be a complete facility for philanthropy in the greater Arbor City area. The ACCF board of trustees had made a committee to manage investment choices regarding the foundation assets. The committee members were mainly concerned with distribution and the unpredictability of portfolio returns. They relied on the worth-at risk (VaR) methodology as a measurement of the danger of both short- and midterm investment losses. The questions in Part (A) of the case direct the pupils to assess the danger inherent in both one specific strength along with the whole ACCF portfolio. For this particular investigation interpret these finds in the circumstance of the risk management of ACCF and the pupils should compute day-to-day VaR and monthly VaR values. In Part (B) the foundation receives a leading contribution. Consequently, the danger inherent in its portfolio changes significantly. The pupils are requested to do a portfolio rebalancing investigation and to review the danger of the fund’s new portfolio.

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