A nonprofit board of directors is working to establish an endowment investment portfolio that will earn enough income to match higher future costs. This is an example of applying the:
A) least return concept.
B) minimum return concept.
C) total return concept.
D) equity concept.

Question

Quizplus · Accepted Answer

The total return concept takes into account both the income generated from an investment portfolio (such as dividends or interest) as well as the capital gains or losses from the investments themselves. By using this approach, the nonprofit board can focus on maximizing the total return of their portfolio rather than just the income generated, which will better enable them to meet their long-term financial goals.

A Nonprofit Board of Directors Is Working to Establish an Endowment