RSK4805 ASSIGNMENT 1 SEMESTER 1 2026 A BANK ESTIMATES THAT ITS PROFIT NEXT YEAR IS NORMALLY DISTRIBUTED WITH A MEAN OF 0.8% OF ASSETS AND A STANDARD DEVIATION OF 2% OF ASSETS. HOW MUCH EQUITY (AS A PERCENTAGE OF ASSETS) DOES THE COMPANY NEED TO BE 95%

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,5/5/26, 7:49 PM Assessment 1: Attempt review




RSK4805-26-Y  Welcome Message  Assessment 1


QUIZ




Started on Tuesday, 5 May 2026, 7:08 PM
State Finished
Completed on Tuesday, 5 May 2026, 7:49 PM
Time taken 40 mins 56 secs


Question 1

Complete

Marked out of 2.00




A BANK ESTIMATES THAT ITS PROFIT NEXT YEAR IS NORMALLY DISTRIBUTED WITH A
MEAN OF 0.8% OF ASSETS AND A STANDARD DEVIATION OF 2% OF ASSETS. HOW MUCH
EQUITY (AS A PERCENTAGE OF ASSETS) DOES THE COMPANY NEED TO BE 95% SURE THAT
IT WILL HAVE POSITIVE EQUITY AT THE END OF THE YEAR.[USE Z-SCORE ROUNDED TO
TWO DECIMAL PLACES]

CONFIDENCE (%) SIGNIFICANCE (%) Z-SCORE
90 10 1.28
95 5 1.65
97.5 2.5 1.96
99 1 2.33
99.5 0.5 2.58
99.9 0.1 3.09


Equity needed as a percentage of assets: 2.50 %

Enter answer as a positive percentage (e.g., 12.05 NOT -12.05).




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, 5/5/26, 7:49 PM Assessment 1: Attempt review

Question 2

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THE RETURN FROM THE MARKET LAST YEAR WAS 9% AND THE RISK-FREE RATE WAS 4.5%.
A HEDGE FUND MANAGER WITH A BETA OF 0.7 HAS AN ALPHA OF 4%. GIVEN THE
PERFORMANCE OF THE MARKET LAST YEAR, WHAT RETURN DID THE HEDGE FUND MANAGER
EARN?


Hedge fund manager return: 11.65 %



Round return to two decimal places, in percentage (e.g., 10.60).




Question 3

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YOU ARE PRESENTED WITH THE FOLLOWING INFORMATION ABOUT A PRIVATE COMPANY.

STATE OF THE ECONOMY PROBABILITY RETURN
State 1 0.35 15.0%
State 2 0.45 10.0%
State 3 0.20 4.0%


Question 1
Calculate the expected return for the company.

Expected return: 10.55 %

Round expected return to two decimal places (e.g., 10.60).


Question 2
Calculate the variance for the company.

Variance: 15.65

Round variance to two decimal places (e.g., 10.60, do not provide the answer
as 0.00106).


Question 3
Calculate the standard deviation for the company.

Standard deviation: 3.96 %

Round standard deviation to two decimal places (e.g., 4.60).




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