1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
grigory [225]
2 years ago
5

Do bonds reduce the overall risk of an investment portfolio? Let x be a random variable representing annual percent return for t

he 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. x: 14 0 39 25 32 27 28 14 14 15 y: 6 2 29 17 26 17 17 2 3 5 Compute the coefficient of variation for each fund. Round your answers to the nearest tenth.
Mathematics
1 answer:
rjkz [21]2 years ago
6 0

Answer:

COV (all stocks) = 0.55

COV (stocks and bonds) = 0.82

Step-by-step explanation:

Coefficient of Variation is used to measure variability.

It is defined as the ration of standard deviation and the mean.

It can be used to compare variability of two population or two samples.

Formula:

\text{Coefficient of Variation} = \displaystyle\frac{\text{Standard Deviation}}{\text{Mean}}

\text{Standard Deviation} = \sqrt{\displaystyle\frac{\sum (x_i -\bar{x})^2}{n-1}}

where x_i are data points, \bar{x} is the mean and n is the number of observations.

Mean = \displaystyle\frac{\text{Sum of all observations}}{\text{Total number of observation}}

x: 14, 0, 39, 25, 32, 27, 28, 14, 14, 15

Mean = \frac{208}{10} = 20.8

Standard~Deviation = \sqrt{\frac{1169.6}{9} } = 11.39

Coefficient~of~Variation = \frac{11.39}{20.8} = 0.55

y = 6, 2, 29, 17, 26, 17, 17, 2, 3, 5

Mean = \frac{124}{10} = 12.4

Standard~Deviation = \sqrt{\frac{924.4}{9} } = 10.13

Coefficient~of~Variation = \frac{10.13}{12.4} = 0.82%

Since coefficient of variation of x is less compared to y, thus it could be said bonds does not reduce overall risk of an investment portfolio.

You might be interested in
Which of the following expressions are equivalent to 6 + (-4) - 5
Mila [183]

Answer:

B and C

Step-by-step explanation:

All you need to do is find the answer for all of them and see which ones match

Original:

6 + (-4) - 5

6 - 4 - 5

2 - 5

<u><em>-3</em></u>

This is the answer for the original expression, now we need to see which one is the correct match....

A. -(-6 + 4 ) - 5

2 negatives being subtracted gives you a positive

6 + 4 - 5

10 - 5

5

Incorrect, so now we know its not A

B. 6 - 4 - ( -5)

Again 2 negatives give you a positive

6 - 4 + (5)

6 - 9

-3

Correct, so now we know its B

C. 6 - (4 + 5)

PEMDAS so do the parenthesis first

6 - 9

-3

Correct, so now we it's C.

D. 6 + 4 - 56

10 - 56

-46

Incorrect, so now we know its not D

E. -(-6) + (-4) - (-5)

Again, 2 negatives equal a positive

6 - 4 + 5

2 + 5

7

Incorrect so now we know its not E

The correct answer is C

Hope this helped!

Have a supercalifragilisticexpialidocious day!

6 0
2 years ago
The senior class at Northwest High School needed to raise money for the yearbook. A local sporting goods store donated hats and
GarryVolchara [31]

Answer:

13,23

Step-by-step explanation:

8 0
3 years ago
What percent of data is in quartile 1
aleksandrvk [35]
One quarter (25%) of the data is in any quartile. That is the meaning of the term "quartile."

25% of data is in quartile 1
8 0
2 years ago
Six tubs for 12 piano lessons find the unit rate
V125BC [204]
12 / 6

Therefore the answer is 2

Hope this helped you today,

Have a good dayN
5 0
3 years ago
What is the mean of 320,294,265, and 301
Gwar [14]

adding 320,294,265 and 301=1180

4 divided by 1180=answer 295

5 0
2 years ago
Read 2 more answers
Other questions:
  • How many hours did you sleep each day this month
    15·2 answers
  • 7. The volume in cubic feet of a box can be expressed as (x) = x3 - 6x2 + 8x, or as the
    12·1 answer
  • Jan mixed 2 pints of blue paint with 5 pints of red paint to make purple paint. He wrote the equation b= ( )r to represent the p
    5·1 answer
  • The ratio of length to width in a rectangle is 3 to 1. if the perimeter of the rectangle is 136 feet, which is the length of the
    10·1 answer
  • Round 12.03994 to 3 decimal place
    7·1 answer
  • Which graph has a slope of 4/5?
    12·1 answer
  • What is 400 less than 2237?
    13·1 answer
  • PLS HELP WILL GIVE BRAINLIEST
    13·1 answer
  • Credit bureau files are used to help evaluate applications for (Points : 1)
    15·1 answer
  • Solve the quadratic equation by factoring:
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!