1. Draw the risky-debt profile for $400,000 in a two-individual joint-depositor account in an FDIC-insured bank as a function of the asset level of the bank together with the profile of the deposit insurance.
2. Repeat the profiles in Question (1) for a single-depositor account. Discuss briefly the difference between these profiles and those of Question (1).

3. Referring to the article Kobe Steel Joins Rooks of Jepon Bonds Reviving After Scandal and the table below: Corporate Spreads {basis points} Tenor in Years Rating 1 2 3 5 7 19 39 AaafAAA 5 8 12 18 23 42 ESE: Aa2 [AA 14 29 33 59 57 E5 39 AZXA 24 39 49 91 99 7'4 193 BasEfBBB 47 T5 89 19? 119 139 179 Bail} BB 231 259 274 295 312 331 397 B2 f B 452 4?8 592 52? 552 573 912 CaafCCC+ 999 929 953 932 7'12 T43 7'75 (a) Assuming these are 19-year bonds, what was the implied credit ratingl on (i) osjssfeurr, (s) 19f13f291?,s,nd (iii) sexurfsms. (b) If you bought USD 199 million faoe of the 19-year Kobe Steel bonds on 99f25f2917, what would your gain or loss on these bonds have been on 19f13f291'F. Assume a risk-free yield of 19 basis points. (e) Assuming a reemrery rate of 49%, estimate the one-year probability of default for Kobe Steel on 19f18f291'i