finance question

Hedging at Pixonix On April 30, 2011, the chief financial officer (CFO) of Pixonix Inc. pondered the impact of the strong AUD on her firm's projected financial results. The AUD had hit another record high and was trading at US$1.09 after a stronger-than-expected jobs report reduced the odds of an interest-rate cut. Pixonix is a medium-sized graphic design company in Sydney with A525 million in annual revenues (primarily Australia, but with a growing proportion from it's New Zealand operations) and a profit margin of 1.1% last year. At an annual cost of US$75 million, the company licensed proprietary software through a U.S. company; this payment was due at the end of April each year. Identify and describe the type(s) and economic seriousness ofthe foreign exchange risk she is facing (3 points) . Should she hedge her position in USD? If yes, what percentage? Justify your choice. (3 points) The January, 2011 Australian government one year bond rate is 5%. What would you expect the January 2012 one year U.S. Treasury Bond rate to be? Explain and show your workings. (4 points)