(LO 6-2, LO 6-3) Which stock return index has a higher return on investment: S&P 500, High-Grade Corporate Bonds, or the U.S. Treasury Bond from 1975 to 2021? Download the “Stock Returns DJIA Nasdaq SP500” Excel dataset from Connect (Source: https://

www.1stock1.com/1stock1_142.htm). Note the annual stock market returns to investment in the various indices from 1975 to 2021.

Required:

1. Using the data analytics toolpak in Excel, perform a t-test: Two-Sample Assuming Equal Variances between the annual returns on the DJIA stock index and S&P 500 Index (Hint: Set Hypothesized Mean Difference to 0 (zero) and alpha at 0.05). What is the p-value associated with the t-test? Is that less than our established alpha of 0.05? Is one statistically greater than the other (using a one-tailed test)?

2. Using the data analytics toolpak in Excel, perform a t-test: Two-Sample Assuming Equal Variances between the annual returns on the DJIA stock index and the NASDAQ Index (Hint: Set Hypothesized Mean Difference to 0 (zero) and alpha at 0.05). What is the p-value associated with the t-test? Is that less than our established alpha of 0.05? Is one statistically greater than the other (using a one-tailed test)?

3. Given the results above, what would you expect would be the result of a t-test between the S&P 500 stock index and the NASDAQ Index? Test the difference using a t-test and document the results.

4. What can you conclude about the returns to these different investments?