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.
x: 13 0 39 22 32 24 25 –13 –13 -22
y: 7 –4 27 16 23 18 16 –4 –5 –7
The sample means for x and y are 10.70 and 8.70, respectively.
Compute a 75% Chebyshev interval around the mean for x-values and also for y-values.
Round your answers to the nearest hundredth.
2 answers