Compute the Risk Premium for the Stock of Omega Tools

question 9

Multiple Choice

Compute the risk premium for the stock of Omega Tools if the risk-free rate is 6%, the expected market return is 12%, and Omega's stock has a beta of 0.8.

• A) 10.8%
• B) 4.8%
• C) 48.0%
• D) 16.8%

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Definitions:

Sensory Sensitivity

An increased or heightened response to sensory stimuli, such as sounds, lights, or textures, which can be overwhelming or uncomfortable.

Theory Of Mind

The ability to attribute mental states—beliefs, intents, desires, emotions, knowledge—to oneself and others and to understand that others have beliefs, desires, and intentions that are different from one's own.

Cognitive Flexibility

The mental ability to switch between thinking about two different concepts, and to think about multiple concepts simultaneously.

False Beliefs

Incorrect or unfounded convictions held despite contrary evidence.