1. Nanometrics, Inc., has a beta of 1.97. If the market return is expected to be 13.75% and the risk-free rate is 7%, what is Nanometrics’ required return? (Round your answer to 2 decimal places)
2. If the fixed rate on a new par value 2-year swap were 7%, what is the value of the fixed-payer’s position on a 6%/LIBOR swap with 2 years left to maturity and a notional principal of $10M? Assume semi-annual payments.
3. Congress proposes reducing the tax exemption for children in married families where only one parent works outside the home. Why would this proposal improved equity, from a Haig-Simmons perspective?