Hi I am new to the forum and have a question regarding question # 12 on page 285 of the Schweser notes. For those of you who have the Schweser notes, I am not going to include the data. The question ask to calculate the expected return in USD for the French Firm and Tokyo inc. My calculations would be as follows: French Firm: Required Return =0.03+(0.8*0.07)+(1-0.25)*0.02=0.101(10.1%) Tokyo Inc: Required Return= 0.03+ (1.2*0.07) +(-0.5*0.02) = 0.104(10.4%) The correct answer is A (10.7% and 10.25%) respectively. I have seen the solution, and my question is if I am a US investor of a French company (or Japanese Company), why do I have to be worried about the sensitivity of its returns to the Japanese Yen (or Euro). Thanks in advance. Pradeep