The bank is considering a strategy of using $$1$ billion to offer additional loans to small

businesses instead of purchasing T$-$bills. Using all the original assumptions provided,

determine the probability distribution of ROA $($assume that noninterest expenses would not

be affected by this change in strategy$).$

INTEREST RATE

SCENARIO

$($POSSIBLE T$-$

BILL RATE$)$

FORECASTED ROA

IF AN EXTRA $$1$

BILLION IS USED

FOR LOANS TO

SMALL

BUSINESSES

PROBABILIT

Y

$8\%$

$9$

$10$