1. Nanometrics, Inc., has a beta of 3.43. If the market return is expected to be 13.50 percent and the risk-free rate is 7.00 percent, what is Nanometrics’ required return?
2. James, the CFO for USM corporation, is doing an analysis on the hedges for the company's positive exposure of CAD 32 million (9 months). He has concluded that the breakeven investment rate of return between the money market hedge and the forward hedge is 22.35%. He knows that the best return he can get from his investment is 11%. Based on this information, James should recommend the ___ hedge.
a. forward
B. money
3. In your own words exaplain,1. If the inflation rate in the US is 3% and 0% in Japan, what should happen to the $US/Yen in % terms?