Referring to the retirement example in Example 11.6, rerun the model for a planning horizon of 10
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Referring to the retirement example in Example 11.6, rerun the model for a planning horizon of 10 years; 15 years; 25 years. For each, which set of investment weights maximizes the VAR 5% (the 5th percentile) of final cash in today’s dollars? Does it appear that a portfolio heavy in stocks is better for long horizons but not for shorter horizons?
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The retirement example in Example 116 which assumes a 5000 investment that appreciates at 7 per year is a great example of how to use Monte Carlo simu...View the full answer
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