1. The average annual return on an Index from 1996 to 2005 was 13.25 percent. The average annual T-bill yield during the same period was 3.35 percent. What was the market risk premium during these ten years? (Round your answer to 2 decimal places.)

Average market risk premium = %

2.  If the risk-free rate is 7.80 percent and the risk premium is 9.5 percent, what is the required return? (Round your answer to 1 decimal place.)

Required Return =  %

3. Nanometrics, Inc., has a beta of 1.02. If the market return is expected to be 9.55 percent and the risk-free rate is 1.80 percent, what is Nanometrics’ required return? (Round your answer to 2 decimal places.)

Nanometrics’ required return = %