2 questions

Consider the following information regarding corporate bonds Rating 0.0% 0.0% 0,2% 0,4% 2.1% 5.2% 9.9% Average Default Rate 0.0% 1.0% 30% 3.0% 8.0% 16.0% 43.0% Recession Default Rate 0.05 0.05 0.05 0.10 o.17 o.26 0.31 Average Beta Market Total Enterprise Equity Debt Company Capitalisation value ($mm) ($mm) Beta Rating 1.1 PBB Taggart nental 54,500 8,000 1.3 AAA 7,200 Rearden Metal S3.800 Wyatt Oil 0.9 A S2,400 3,800 Nielson Motors 1,500 4,400 1.75 BB Your estimate of the asset beta for Wyatt oil is closest to: 0.66 0.42 0.59