Given Earnings Decline (0.25), Spending Variance (55), Initial Investment (500) and Rate of Return (RandNormal(0.06, 0.12))
when one of these independent variables change
then how
sensitive is Investment (22) over a 30 year time period (-1,000)
H1: if you Earn more then Investment will last much longer => rejected
H2: if you Spend less then Investment will last much longer => accepted
H3: if your Initial Investment is higher then Investment will last much longer => accepted
H4: if you reduce your Spend when Investments are declining then Investment will last much longer => accepted
Given Earnings Decline (0.25), Spending Variance (55), Initial Investment (500) and Rate of Return (RandNormal(0.06, 0.12))
when one of these independent variables are optimised
then Investment will last exactly 30 years by minimising the absolute investment gap
H1: if you set an appropriate Spending Base then remaining Investment is 0 => rejected
H2: if you set an appropriate Spending Reduction then remaining Investment is 0 => rejected
Source for investment returns: https://seekingalpha.com/article/3896226-90-year-history-of-capital-market-returns-and-risks
