Use the following information to answer the question(s) below. Consider the following information regarding corporate bonds:

Rating

AAA

AA

A

BBB

BB

B

CCC

Average Default Rate	0.0%	0.1%	0.2%	0.45%	2.2%	5.5%	12.2%
Recession Default Rate	0.0%	1.0%	3.0%	3.0%	8.0%	16.0%	48.0%
Average Beta	0.05	0.05	0.05	0.10	0.17	0.26	0.31

Company	Market Capitalization ($mm)	Total Enterprise Value ($mm)	Equity Beta	Debt Rating
Taggart Transcontinental	4500	8000	1.1	BBB
Rearden Metal	3800	7200	1.3	AAA
Wyatt Oil	2400	3800	0.9	A
Nielson Motors	1500	4400	1.75	BB

Suppose that because of the large need for steel in building railroad infrastructure, Taggart Transcontinental and Rearden Metal decide to form into one large conglomerate. Your estimate of the asset beta for this new conglomerate is closest to:

		0.42.
		0.59.
		0.68.
		0.66.