ASA TUURIEACE Do bonds reduce the overal 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...

Extracted text: ASA TUURIEACE Do bonds reduce the overal 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. *: 36 0 13 24 22 32 2s -19 -22 -19 y: 17 -9 24 18 10 9 9 -1 -7 -1 A USE SALT (a) Compute Ex, Le, Ey, Sy. (b) Use the results of part (a) to compute the sample mean, variance, and standard deviation forx and for y. (Round your answers to four decimal paces) (c) Compute the coefficient of variation for each fund. (Round your answers to the nearest whole number) Use the coefcients of variation to compare the two funds. For each unit of return, the stock und (x) has lower nisk. For each unit of return, the balanced fund (v) has lower rik For each unit of retum, the funds have equal risk. ars represents risks andxrepresents expected retum, then s/K can be thought of as a measure of nsk per unit of expected retum, In this cane, why is a smaller CV better Exglan A smaller CV is better because t indicates a higher risk per unit of expected return. A smaller CV is better because it indicates a lower risk per unit of expected return