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Do bonds reduce the overall risk of an investment portfolio? Let x be a random variable representing the annual percent return for the Vanguard Total Stock Index (all Stocks). Let y be a random variable representing the annual return for the Vanguard Balanced Index (60% stock and 40% bond). For the past several years, assume the following data. Compute Σχ. X: 15 O y. 8 00 O134 O109 139 078 159 38 -2 29 25 31 27 28 -15 -15 18 26 16 18 -2 -3 -25 -8

Do bonds reduce the overall risk of an investment portfolio? Let x be a random variable representing the annual percent return for the Vanguard Total Stock Index (all Stocks). Let y be a random variable representing the annual return for the Vanguard Balanced Index (60% stock and 40% bond). For the past several years, assume the following data. Compute Σχ. X: 15 O y. 8 00 O134 O109 139 078 159 38 -2 29 25 31 27 28 -15 -15 18 26 16 18 -2 -3 -25 -8

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
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**Do Bonds Reduce the Overall Risk of an Investment Portfolio?** To explore this question, let's consider two different investment indices and their respective annual returns over several years. - Let \( x \) be a random variable representing the annual percent return for the Vanguard Total Stock Index (all Stocks). - Let \( y \) be a random variable representing the annual return for the Vanguard Balanced Index, which is composed of 60% stock and 40% bonds. Below is the data for the past several years: | Year | \( x \) (Total Stock Return %) | \( y \) (Balanced Return %) | |------|------------------------------|-----------------------------| | 1 | 15 | 8 | | 2 | 0 | -2 | | 3 | 38 | 29 | | 4 | 25 | 18 | | 5 | 31 | 26 | | 6 | 27 | 16 | | 7 | 28 | 18 | | 8 | -15 | -2 | | 9 | -15 | -3 | | 10 | -25 | -8 | To analyze the overall return for the Vanguard Total Stock Index (x), we need to compute \( \sum x \), which is the sum of the returns for all the given years. To find \( \sum x \): \[ \sum x = 15 + 0 + 38 + 25 + 31 + 27 + 28 - 15 - 15 - 25 \] Now, let's calculate it: \[ \sum x = 109 \] Thus, the correct option for \( \sum x \) is: - [ ] 134 - [X] 109 - [ ] 139 - [ ] 78 - [ ] 159
Transcribed Image Text:**Do Bonds Reduce the Overall Risk of an Investment Portfolio?** To explore this question, let's consider two different investment indices and their respective annual returns over several years. - Let \( x \) be a random variable representing the annual percent return for the Vanguard Total Stock Index (all Stocks). - Let \( y \) be a random variable representing the annual return for the Vanguard Balanced Index, which is composed of 60% stock and 40% bonds. Below is the data for the past several years: | Year | \( x \) (Total Stock Return %) | \( y \) (Balanced Return %) | |------|------------------------------|-----------------------------| | 1 | 15 | 8 | | 2 | 0 | -2 | | 3 | 38 | 29 | | 4 | 25 | 18 | | 5 | 31 | 26 | | 6 | 27 | 16 | | 7 | 28 | 18 | | 8 | -15 | -2 | | 9 | -15 | -3 | | 10 | -25 | -8 | To analyze the overall return for the Vanguard Total Stock Index (x), we need to compute \( \sum x \), which is the sum of the returns for all the given years. To find \( \sum x \): \[ \sum x = 15 + 0 + 38 + 25 + 31 + 27 + 28 - 15 - 15 - 25 \] Now, let's calculate it: \[ \sum x = 109 \] Thus, the correct option for \( \sum x \) is: - [ ] 134 - [X] 109 - [ ] 139 - [ ] 78 - [ ] 159
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