Literature Review The student makes a decent attempt to organise the literature

Literature Review
The student makes a decent attempt to organise the literature review around ideas. However, certain important dimensions of the wider topic are ignored, as are some key references related to the topic.
Data
The choice of the explanatory variables is well explained. In addition, the student could have better motivated the choices made in terms of sample size, sampling frequency, data source, and potential data limitations.
Methodology
The empirical approach is NOT suitable for attempting to answer the research question. The student used a naïve, non-parametric approach in characterizing market states. In addition, the student has not adequately motivated the choice of empirical approach again parametric models. More importantly, as the focal point is prediction, an out-of-sample assessment would be necessary. Finally, the economic significance of the results could have been tested by constructing a portfolio that aims to beat the passive buy and hold strategy.
Findings
The discussion of empirical results is not sufficient. The discussion demonstrates a superficial understanding of the topic and a deeper discussion of the economic channels was needed.
Overall
The student has made an unsatisfactory effort to answer the research question.