Worksheet 4-4:

Stock market observers have opinions about whether stock returns tend to be different between the

first, second, third, or fourth year of a U.S. Presidential administration. There are also opinions about

whether stock returns are better with a Democratic President or Republican President. The table on

Worksheet 4-4 organizes the total annual return on S&P 500 (as a percent without the percent sign) for

years from 1941 through 2020 according to the year of the administration or whether the President was

a Democrat or Republican.

Conduct tests of whether there are differences in average total annual returns on the S&P 500 according

to whether the President was a Democrat or Republican and according to the year relative to a

Presidential administration. Also test whether the degree of interaction between the party of the

President to determine the validity of doing the tests of differences in means for each factor. Use a 0.05

significance level for all tests.