Question 1 Company 1 has been listed on the London Stock Exchange for 10 years. It supplies catering to airlines in the UK and EU. For the last three years, Company 1 's business suffered a nose-dive due to the world-wide pandemic and reduced flights in the UK and EU. The Company's directors decided to acquire a fully owned subsidiary, which manufactures Rapid Antigen Tests two years ago as part of the diversification strategy. A friend who recently studies the Capital Asset Pricing Model wants to estimate the beta for Company 1 using an ordinary least square approach on monthly share prices of Company 1 for the last 5 years onto the index prices of FTSE 100. Required Identify 5 practical issues with your friend's approach in estimating beta for Company 1 . Clearly explain any potential measurement errors and suggest ways which you may improve the accuracy of the estimated beta. (25 marks)