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RSK4805 Assignment 3 (Detailed Answers) Year Module - Due 15 August 2024
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RSK4805 Assignment 3 (Detailed Answers) Year Module - Due 15 August 2024
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By: Tommyhilfiger2022 • 2 months ago
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RSK4805ASSIGNMENT 3 (YEAR MODULE)
DUE DATE: 15 August 2024
Written Assignment Submission Guidelines:
Please ensure that your assignment is submitted electronically through the myUnisa platform no
later than …August 2024. Kindly note that fax or email submissions will not be accepted.
NB: Assignment submitted to the lecturer(s) through email will not be considered.
QUESTION 1
1.1 A bank estimates that its profit next year is normally distributed with a mean of 0.8% of assets
and a standard deviation of 2% of assets. How much equity (as a percentage of assets) does
the company need to be 99% sure that it will have positive equity at the end of the year? (Use
z-values rounded to two decimal places) (2)
ANSWER:
Required Equity Percentage
• Given:
o The bank's profit is normally distributed with a mean of 0.8% of assets.
o Standard deviation is 2% of assets.
To be 99% sure that the equity will be positive, we use the z-value corresponding to 99%, which
is approximately -2.33.
The required equity percentage can be calculated using:
• Mean return = 0.8%
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