You've decided to use the pure play method for estimating a project's beta. Let's assume that your new product is in the pharmaceutical industry. That means the first thing you'll have to do is calculate the beta on a drug company-let's pick Pfizer for this-that most closely matches your new product. To do this let's use the MoneyCentral site, which is a research site for the Microsoft network. Ifyou have the company's ticker symbol, which is a unique one-to four-place alphabetical

"niclmame" for a company-for Pfizer the ticker symbol is pfe--you can go to a company report (moneycentral.msn.com/investor/researchiprofiJe.asp?) which provides a one-page overview of the company, including its beta.

You can also find the beta on Yahoo! Finance:

1. From the Yahoo home page (www.yahoo.com). choose "Yahoo! Finance" (first link under

"Info").

2. Enter the ticker symbol in the first box; choose "Basic" from the second box; click on "Get".

3. Click on "Profile" in the "More Info" box.

4. Go to the table at the bottom of the page. Beta will be the fourth item in the first column.

Just as with MoneyCentral, in order to get the information for a given firm, you need to know its ticker symbol. The MoneyCentral site is a place to find the ticker symbol if you don't know it.

1. Let's look up four companies using both MoneyCentral and Yahoo! Finance:

• Pfizer (pfe)

• Amaron.com (amzn)

• Aema (aet)

• Intel (intc)

What do you think the betas would be for these companies? Remember that the beta of the market is 1.0, less risky companies would be less than I, and more risky ones would be more than I.

Were you close? Are the betas on both sites the same? \Vhy might there be differences in the betas?