Question: Variable description:

InvestVentureCapital: Number of years of retirement support from a venture capital portfolio

InvestPersonalFunds: Number of years of retirement support from a portfolio of mutual funds

InvestCompanyStock: Number of years of retirement support from a portfolio investing in company stock

InvestDiversifiedPension: Number of years of retirement support from a diversified pension portfolio

Financial planners are assessing alternative retirement strategies for executives. Some executives tend to become very conservative toward the end of their career and switch to low-risk bonds. Ray Mignone, a Little Neck, New York, financial planner, warns against becoming too conservative too soon. With life expectancies growing, planners now suggest a fairly aggressive investment approach even for those in their fifties. To make the most of your peak earning years as well as your "last chance" to invest for retirement, Mignone suggests "a well-diversified strategy." That means keeping the bulk in stocks, despite the volatile market. Suppose that Ray were to evaluate the retirement funds for 200 executives and determine the number of years that their retirement money could support themselves if their retirement money were moved completely into bonds. These 200 executives were selected so that 50 had most of their retirement money either in venture capital, personal mutual funds, their company's stock, or a diversified pension fund. Data were recorded as to the number of years that the executives could live using the money from their retirement plan assuming that they needed 80% of their current salary to maintain their lifestyle.

a. Form a histogram of the data for each of the four variables (InvestVentureCapital, InvestPersonalFunds, InvestCompanyStock, InvestDiversifiedPension). How would you describe the differences?

b. At the 5% significance level, do the data indicate a difference in the number of years that the retirement strategies would support an executive?

c. Use a multiple comparisons procedure with a 5% significance level to examine the differences in the retirement strategies.

d. In an executive summary, state recommendations that the financial planner should make to young executives deciding on a retirement strategy?