The Beta of HSR's Stock Is 1

question 14

Multiple Choice

The beta of HSR's stock is 1.15, the expected return on the S&P500 is 7.4%, and T-bonds are yielding 2.4%. What is the required return on HSR stock?

• A) 5.75%
• B) 8.15%
• C) 8.51%
• D) 10.91%

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Definitions:

Creative Thinking

Creative thinking involves generating new and original ideas, solutions, or approaches to problems, by viewing situations in novel ways.

Contest

A promotional strategy involving a competition in which participants perform tasks to win prizes or recognition.

Analytical Thinking

The ability to solve problems quickly and effectively by evaluating information deeply and accurately.

Two-for-One

A promotional offer where customers receive two items for the price of one, commonly used to attract buyers and increase sales volume.