PLEASE ANSWER ASAP!

Assume that you are a member of the asset-liability management (ALM) committee of PMK Bank. You have collected following information, based on which you are requested to write a short report to the committee comparing the probability of book value insolvency of PMK Bank with the competitor PTY Bank. [5 marks]

	PMK Bank	PTY Bank
Expected return on assets	0.15	-0.10
Total equity (in millions)	15	18
Total liabilities (in millions)	105	90
Variance of ROA	0.005	0.002