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QUESTION 6 Consider the following information regarding corporate bonds Rating Average AAAAAA BBB BBB CCC...

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QUESTION 6 Consider the following information regarding corporate bonds Rating Average AAAAAA BBB BBB CCC 0.09 0.09 0.29 0.4%)2.19 5.2% 19.9% Default Rate Recession Default Rate 110.0%)1.0% )3.0%)3.0%)8.0% 16.0%)43.0% Average Beta10.051005|0.0510101017|026 |031 Total Market Capitalisation Enterprise Equity Debt (Smm) Company Beta Rating Smm) Taggart %4,500 8,000 Transcontinental Rearden Metal $3,800 Wyatt Oil Nielson Motors$1,500 7,200 3,800 4,400 0.9 A 1.75 BB 2,400 Your estimate of the asset beta for Nielson Motors is closest to O 0.59 O 0.66 O 0.42 O 0.71

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