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Question: do bonds reduce the overall risk of an investment portfolio...
Question details
Do bonds reduce the overall risk of an investment portfolio? Let x be a random variable representing annual percent return for Vanguard Total Stock Index (all stocks). Let y be a random variable representing annual return for Vanguard Balanced Index (60% stock and 40% bond). For the past several years, we have the following data.
x: |
26 |
0 |
26 |
32 |
23 |
29 |
32 |
−23 |
−15 |
−24 |
y: |
9 |
−10 |
20 |
23 |
23 |
17 |
17 |
−8 |
−10 |
−7 |
a. Use the results of part (a) to compute the sample mean, variance, and standard deviation for x and for y. (Round your answers to two decimal places.)
x- s2 s
b. Compute a 75% Chebyshev interval around the mean for x values and also for y values. (Round your answers to two decimal places.)
x | y | |
Lower Limit | ||
Upper Limit |
c.Compute the coefficient of variation for each fund. (Round your answers to the nearest whole number.)
x | y | |
CV | % | % |
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