Question
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
Do bonds reduce the overall risk of an investment portfolio? Letxbe a random variable representing annual percent return for Vanguard Total Stock Index (all stocks). Letybe 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: | 36 | 0 | 12 | 37 | 18 | 17 | 15 | 20 | 11 | 19 |
y: | 26 | 8 | 26 | 21 | 24 | 12 | 21 | 10 | 4 | 1 |
(a) Computex,x2,y,y2.
x | x2 | ||
y | y2 |
(b) Use the results of part (a) to compute the sample mean, variance, and standard deviation forxand fory. (Round your answers to four decimal places.)
x | y | |
x | ||
s2 | ||
s |
(c) Compute a 75% Chebyshev interval around the mean forxvalues and also foryvalues. (Round your answers to two decimal places.)
x | y | |
Lower Limit | ||
Upper Limit |
(d) Compute the coefficient of variation for each fund. (Round your answers to the nearest whole number.)
x | y | |
CV | % | % |
In this problem, we explore the effect on the standard deviation of multiplying each data value in a data set by the same constant. Consider the data set16,4,8,13,14.(a) Use the defining formula, the computation formula, or a calculator to computes. (Round your answer to four decimal places.) s= (b) Multiply each data value by7to obtain the new data set112,28,56,91,98. Computes. (Round your answer to four decimal places.) s=
Given 1 mile 1.6 kilometers, what is the standard deviation in kilometers? (Enter your answer to two decimal places.) s = km
In this problem, we explore the effect on the standard deviation of adding the same constant to each data value in a data set. Consider the following data set.
8, 6, 14, 16, 14
(a)Use the defining formula, the computation formula, or a calculator to computes. (Enter your answer to four decimal places.)
(b)Add3to each data value to get the new data set11,9,17,19,17. Computes. (Enter your answer to four decimal places.)
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