Q.2 why is the proxy for Krantz taken as world index in the solution, when the question mentions SA index as one?
I have been wondering this myself. Have you found an answer yet?
"As an alternative, Kim decides to use the South Africa Basic Materials Index as a proxy to estimate the beta of Krantz relative to the MSCI World Index"
the exhibit gives you two betas, one is between SABMI to MSCI World and another between SABMI to MSCI SA. You fell into a trap, read the vignette carefully.
MSCI SA is irrelevant