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- This topic has 3 replies, 2 voices, and was last updated 7 years ago by
John Moffat.
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- December 15, 2017 at 2:14 am #423333
Hello John
Please can you tell me where on the question does it say that mercury is planning on acquiring Jupiter. Often these questions have two or three unrelated bits for different parts of the question, which i assumed on seeing Jupiter’s details. ACCA really need to get their questions into order. People spend a lot of time and money failing exams. It’s not your fault but perhaps you could pass the message on at the ACCA Christmas party….
ThanksDecember 15, 2017 at 7:32 am #423424Mercury is not buying Jupiter, and the answer to none of the parts assumes that they are buying Jupiter!!
Jupiters details are needed in order to be able to calculate the beta for the training business and to therefore be able to calculate the overall beta for Mercury (since the question gives the beta for financial services).
The question is perfectly worded, and is a very standard application of CAPM.
(I don’t know if the ACCA has a Christmas party, but even if they do then they don’t invite me 🙂 )
December 15, 2017 at 8:35 am #423438Ok
i figured that out for getting the asset beta, but if they are not acquiring them why do they use their figures?? Or is Jupiter an example of a company in the sector.
Previously this sort of question came up when they were buying a business or project outside their sector. So jupiter would have been that businessDecember 15, 2017 at 4:05 pm #423617The question does make it clear that Jupiter is in the same business as the training part of Mercury and therefore it has to be used as an example of a company in that sector.
There is nothing in the question (or the answer) to suggest that they are buying Jupiter.
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