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Sir,
Kaplan Q41 question we have the overall asset beta and we have the asset beta of other activities.I am not quite clear how the component asset beta is derived. More specificly I don’t understand where from the waight 0.75 and 0.25 appeared. This is jun 12 Tisa Co question.
If you have watched my free lectures on CAPM, you will know that the total beta is the weighted average of the individual betas.
They have used 75:25 because the question says that 75% of Elfu’s equity can be attributed to other activities excluding the component production (and therefore the other 25% relates to component production).
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