Question 3 Note that observed performance differences are:Winners minus loser portfolio results in an average return of 2.066% in low sentiment period and 0.054% in high sentiment period. Usually you'd invest in a high sentiment as this would generate higher returns but not in this case. So why? And how would you exploit those differencesFor question 4 please keep Mispricing and arbitrage in mind. If the gap between the performance differences shrink it means arbitrage is working. When sentiment is high you expect these differences to disappear. Please elaborate and also explain how to test the conjectures.. For your reference this was the entire assignment but I put everything you need in the picture and notes aboveWhen the demand for ESG attributes are high, high ESG firms may get over-priced and low ESG firms may be under-priced. The goal is to examine the difference in the performance of low- and high-ESG firms, conditional upon the level of investor interest in ESG-related issues (i.e., ESG sentiment). Only consider the firms in the Dow Jones index.1. Using appropriate search terms on Google Trends, identify low and high ESG sentiment periods. Use known ESG-related events to validate your classification.2. Compute the performance of the following ESG-based portfolios during high and low senti- ment periods: (i) High and Low ESG Dow, (ii) High and Low ESG Value, (iii) High and Low ESG Growth, (iv) High and Low ESG V?G, (v) High and Low ESG Winners, (vi) High and Low ESG Losers, and (vii) High and Low ESG W?L.3. Describe how you would exploit the observed performance differences.4. Discuss how these performance differences will eventually disappear. How will you test your conjectures?describe briefly.

3. Describe how you would exploit the observed performance differences. 4. Discuss how these performance differences will eventually disappear. How will you test your conjectures? Please describe briey