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1. You are a successful proprietary day trader at a trading shop where you trade on behalf of other investors. At the beginning of everyday,

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1. You are a successful proprietary day trader at a trading shop where you trade on behalf of other investors. At the beginning of everyday, you receive $100K to trade, You estimate that you earn a daily profit that is normally distributed with a mean of SSK and a standard deviation of $50K (the standard normal table is attached to the end of this document). a. How much capital in addition to the $100,000 should the firm deposit to your account to be 99.9% sure that your account will not fall below zero in a given day. b. What is the 95% confidence interval for your total dollar trading profits in one year? Compute the expected annualized Sharpe ratio of your account (the risk free rate is zero). Return Sharpe ratio Standard deviation c

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