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The performance of value and growth stocks has received considerable attention amongst finance academics and practitioners. The value strategy is one of the most popular

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The performance of value and growth stocks has received considerable attention amongst finance academics and practitioners. The value strategy is one of the most popular investment strategies adopted by institutional and retail investors. Benjamin Graham is often credited as a pioneer for the value investment strategy. You are skeptical and are not sure whether the value strategy works in Australia. In this individual assignment, you would be tasked with writing a report on whether the value strategy can produce superior performance in Australia. Professor Kenneth French is one of the authors in Fama and French's (1993) threefactor model that incorporates a value premium. In his data library, he has shared historical returns for various asset classes and portfolios, including the portfolio returns based on four value metrics in the Excel File named FValue Strategy in Australiaxlsx' . Based on the Excel spreadsheet indicated above, perform the following tasks. You are encouraged to use Excel to perform the analyses. However, your analyses and discussion of findings must be presented as a report in a WordfPDF format. The word limit for the report is 1000 words excluding Executive Summary and References. l] The four metrics given in the spreadsheet are booktomarket, earningstoprice, cashflowstoprice, and dividendtoprice ratios. Stocks are categorized into high, low, and zero portfolios based on the four metrics. For example, high booktomarket portfolios contain stocks with a high level of booktomarket ratio. Discuss whether stocks with high, low, or zero levels, based on these metrics, are considered as value or growth stocks. {5 marks) 2) Calculate the average returns and standard deviations to the various value and growth portfolios based on the four metrics. Over the sample period considered, do you think value or growth stocks tend to generate a higher return? {15 marks) 3) Compare the performance of these value and growth portfolios with the market return over the same period. Do they outperform or underperform the market? (5 marks) 4) Examine the timeseries return pattern of these portfolios. Are there any specific periods in which valuefgrowth strategies outperform or underperform? Based on the timeseries return pattern, do you think market condition (e.g. hoom or recession) plays a role in explaining the return variation between value and growth stocks? (15 marks) 5) Conduct some literature review on the performance of the value strategy in the US, the largest capital market in the world. Is your nding consistent with the evidence from the US

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