You are evaluating the beta for ITC. ITC has three businesses - Hotels, Tobacco and FMCG. The equity beta of Hotels sector is 1.9 and the average debt equity ratio for the sector is 50%. The equity beta of Tobacco sector is 0.8 and the average debt-equity ratio for tobacco sector is 20%. The equity beta of FMCG sector is 1 and the average debt-equity ratio for the sector is 30%. ITC gets 70% of its operating profits from tobacco, 20% from FMCG and 10% from Hotels. If tax rate is 30% and ITC's debt-equity ratio is 25%, estimate ITC's beta. Ignore cash effects.

Options are

0.94

1.20

1.02

1.11

Second question is

You purchase a call option and a put option, both with an expiry of 2 months and an exercise price of 2200. The purchase price for the call option is 130 and that for the put option is 110. In what price range of the underlying (at expiry) will you make a loss?

Options are

1810 to 2190

1890 to 2310

1920 to 2380

1960 to 2440

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