Q1and 2

We discussed In class that the beta for a firm should reflect the "discretionary" nature of Its products and/or services; the more discretionary a proc service is, the higher you would expect the beta to be. Given this principle, which of the following categories of retail firms should have highest beta? Discount retailer (Walmart) Luxury retailer (Tiffany's) Department store (Mac/s) Grocery store (Safeway) A company is considering outsourcing its personnel services. By doing so, it will replace the fixed cost of having a human resources department with an hourly fee that it will be paying a vendor who will provide the services (i.e, fixed cost will be lower, variable cost will be higher). Holding all else constant, what effect would this action have on the beta for the company? (1) lt will Increase the beta lt will decrease the beta lt will not change the beta - 1 ; When analysts use the "pure play method" to determine a project or privately held company's beta, this is best described as...(1)