Do Bonds Reduce the Overall Risk of an Investment Portfolio $$\sum y ^ { 2 }$$

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. $$\sum y ^ { 2 }$$ $$\begin{array} { l l l l l l l l l l l } x : & 12 & 0 & 37 & 24 & 35 & 26 & 27 & - 12 & - 12 & - 24 \\y : & 8 & - 5 & 28 & 15 & 25 & 16 & 15 & - 5 & - 6 & - 8\end{array}$$

A) 2304
B) 2240
C) 2265
D) 2268
E) 2329