10. (LO 4.3, 4.4) Which has the highest return on investment from 1928 to 2020—the S&P 500, high-grade corporate bonds, or U.S. Treasury bonds? Download the Investment Returns data set in Excel. The source is Aswath Damodaran, NYU Finance Professor, at http://pages.stern.nyu.edu/∼ adamodar/New_Home_Page/datafile/histretSP.html.

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

2. Using the Analysis ToolPak in Excel, perform a t-test: Two-Sample Assuming Equal Variances between the annual returns on high-grade corporate bonds and U.S. Treasury Bonds. (Hint: Set Hypothesized Mean Difference to 0 (zero) and alpha at 0.05.)

What is the p-value associated with the t-test? Is it less than our established alpha of 0.05? Is one statistically greater than the other (using a one-tailed test)?

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

4. Given the results above, what do you expect would be the result of a t-test between the S&P 500 stock index and U.S. Treasury bonds?