Do Bonds Reduce the Overall Risk of an Investment Portfolio

question 6

Multiple Choice

Do bonds reduce the overall risk of an investment portfolio? Let x be a random variable representing annual percent return for the Vanguard Total Stock Index (all Stocks) . Let y be a random variable representing annual return for the Vanguard Balanced Index (60% stock and 40% bond) . For the past several years, assume the following data. Compute the coefficient of variation for each fund. Round your answers to the nearest tenth. $$\begin{array} { l c c c c c c c c c c } x : & 12 & 0 & 38 & 23 & 34 & 25 & 26 & - 12 & - 12 & - 23 \\y : & 10 & - 5 & 28 & 15 & 24 & 16 & 15 & - 5 & - 6 & - 10\end{array}$$

• A)for x-values: , and for y-values: \(123.1 \%\) \(166.6 \%\)
• B)for x-values: , and for y-values: \(190.8 \%\) \(166.6 \%\)
• C)for x-values: , and for y-values: \[166.6 \%\] \(190.8 \%\)
• D)for x-values: , and for y-values: \(123.1 \%\) \(258.3 \%\)
• E)for x-values: , and for y-values: \(190.8 \%\) \(258.3 \%\)

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Definitions:

Sensory Components

Parts of the nervous system that receive and process sensory information from the environment or the body, leading to sensations.

Nasopharynx

The upper part of the throat located behind the nose, which connects the nasal cavity to the mouth and serves as an airway in the respiratory system.

Soft Palate

The flexible part at the back of the roof of the mouth, distinguishing the back of the oral cavity from the nasopharynx.

Pharynx

A muscular tube that connects the mouth and nasal passages to the esophagus and larynx, serving both the respiratory and digestive systems.