Stock patterns. Some people believe that the stock market shows patterns according to the day of the week or the month of the year (“Sell in May and walk away”). We have the closing price of the Dow Jones Industrial Average for every day from January 2009 through February 2013.

Here is the ANOVA:

analysis of variance for DJIA Source DF Sum of Squares Mean Square F-ratio P-value day 4 415903 103976 0.03514 0.9976 month 11 78391675 7126516 2.4082 0.0059 day*month 44 12814707 291243 0.09842 1.0000 Error 975 2885283286 2959265 Total 1034 2976872229

a) Is this an experiment or an observational study?

b) State the hypotheses.

c) What do you conclude about the average value of the DJIA on different days of the week? Explain.

d) What do you conclude about the average value of the DJIA in different months? Explain.

e) What does the interaction term test and what do you conclude about that?