The North American Bank needs to raise $50 in financing at the beginning of the period to

Question:

The North American Bank needs to raise $50 in financing at the beginning of the period to finance an investment that will yield a random payoff at the end of the period. This payoff has the following probability distribution. State 0 Payoff A(0) Probability p(0) 1 $0 0.25 2 $50 0.25 3 $100 0.25 4 $150 0.25 The single-period riskless interest rate is 0.10. The bank must raise $30 in FDIC-insured deposits, $15 in