Use Excel for this assignment. Submit an Excel spreadsheet.

1. A banks estimate of next year profit (as a percentage of assets) is a normal distribution with mean and standard deviation of 1% and 2%, respectively. How much equity (as a percentage of assets) does the company need to be

(a) 95% sure that it will have a positive equity at the end of the year

(b) 99% sure that it will have a positive equity at the end of the year

(b) 99.9% sure that it will have a positive equity at the end of the year

(d) Assume the banks capital is 4% of assets. How much equity capital in addition to that should regulators require for there to be a 99.95% chance of the capital not being wiped out by losses?