"Semitool Corp. has an expected excess return of 20% for next year. However, for every unexpected 1% change in the market, Semitool's return responds by a factor of 0.9. Suppose it turns out that the economy and the stock market do better than expected by 10% and Semitool's products experience more rapid growth than anticipated, pushing up the stock price by another 4%. Based on this information, what was Semitool's actual excess return? Note: Express your answers in strictly numerical terms. For example, if the answer is 5 %, write 0.05"

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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"Semitool Corp. has an expected excess return of 20% for next year. However, for every unexpected 1%
change in the market, Semitool's return responds by a factor of 0.9. Suppose it turns out that the
economy and the stock market do better than expected by 10% and Semitool's products experience more
rapid growth than anticipated, pushing up the stock price by another 4%. Based on this information,
what was Semitool's actual excess return? Note: Express your answers in strictly numerical terms. For
example, if the answer is 5 %, write 0.05"
Transcribed Image Text:"Semitool Corp. has an expected excess return of 20% for next year. However, for every unexpected 1% change in the market, Semitool's return responds by a factor of 0.9. Suppose it turns out that the economy and the stock market do better than expected by 10% and Semitool's products experience more rapid growth than anticipated, pushing up the stock price by another 4%. Based on this information, what was Semitool's actual excess return? Note: Express your answers in strictly numerical terms. For example, if the answer is 5 %, write 0.05"
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