is levered beta, pure play beta part of curriculum?

I have NO idea wtf they are, and searched every corner of curriculum and didn’t find it. But how funny, it is on CFAI mock exam. ^%)*^$*^%*& have I missed anything? What are they?

also, the question states the project is 40% financed by Debt, but the answer CFAI used 1/2 * total project value * cost of debt. I hope this kind of error does not become real… My question, if the project is 40% financed by debt, does it mean that investment in net working capital will be 40% financed by debt too? so when we calcualate accounting income of the project, interest expense = ( intial BV + NWC)* cost of debt? or just interest expense = ( intial BV )* cost of debt ? which one? thank you…

yes, part of corporate finance

Hey orm, what LOS? I know Pure Play/Levered Beta was part of last year’s curriculum, but I believe it is no longer in there.

what’s a pure play beta?

The concept involved taking a comparable publicly traded companies beta with similar business risks and adjusting for financial risk by deleveraging it and then releveraging it to match your firms. I’m pretty sure it is not part of this year’s curriculum; unless someone can prove otherwise.

I just did a quick check on Schweser and didn’t find it there either…I remember it from last year but definitely haven’t seen it in the curriculum this year.

Definitely not part of this year’s LOS gentlemen…it is possible some of the questions on the mock were recycled from last year’s sample exams. Interesting.

thank you all for double checking, now I feel much better…

I seem to recall another post saying several questions were recycled from last year…you would have hoped at $1 per question (or whatever the average is) that they’d at least scrub the list to make sure the question is still part of the CBOK.

what’s cbok?

Candidate Body Of Knowledge. (Made up of all the LOSs)

Was there last year, not this year chaps.

It’s definitely in the BOK this year- reading 32

It might be in the reading (please provide a CFAI page #), but it isn’t part of an LOS this year; if you think otherwise please state which LOS. LAST year’s LOS (Calculate an unlevered beta using the pure-play method and use this unlevered beta to estimate a levered beta for a project or company)…that LOS doesn’t exist this year.

I take that back… thought I saw it somewhere but can’t find it now.



^^^ Hahahaha wicked, LM’s still got it!

phew…i saw the subject on this and almost cried…thinking i’d missed it somewhere too going crazy…