Hastings Entertainment Has a Beta of 1

question 58

Multiple Choice

Hastings Entertainment has a beta of 1.24. If the market return is expected to be 10 percent and the risk-free rate is 4 percent, what is Hastings' required return?

• A) 11.44%
• B) 12.44%
• C) 14.96%
• D) 16.40%

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Definitions:

Median Voter Theorem

A theory that suggests the outcome of a majority vote is most likely to match the preferences of the median voter.

Majority-Rule

A decision-making process that follows the principle that the opinions or preferences of more than half of the members of a group have the authority to make decisions binding on the whole group.

Median Voter

A theoretical concept in political science and economics suggesting that the outcome of a majority rule voting process will reflect the preferences of the median voter when preferences are single-peaked.

Decision Making

The cognitive process of selecting a course of action from among multiple alternatives.