(Answered) Do bonds reduce the overall risk of an investment portfolio

Statistics

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 .

12 0 39 23 31 25 26 -12 -12 -23

9 -3 26 15 24 17 15 -3 -4 -9

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