Which of the following methods involves calculating an average beta for firms in a similar business and then applying that beta to determine the beta of its own project?
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A. B. C. D. E.D
The pure play method is used for estimating the beta of a project in which a firm identifies several companies whose only business is the product in question, then calculates the beta for each firm, and finally, averages the betas to find an approximation to its own project's beta.