A company estimates that its profit over each calendar year is normally distributed with a mean...

 

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A company estimates that its profit over each calendar year is normally distributed with a mean of 1% of assets per year and the standard deviation of 2% of assets per year. (a) (6 points) How much equity (as a percentage of assets) does the company currently need to have in order to be 99% sure that its equity will not fall below 5% of its assets at the end of two years. (b) (4 points)If the company currently has equity that is 3% of its assets, what is the probability that all of its equity will be wiped out at the end of three years? Ignore taxes. Remember to show your work A company estimates that its profit over each calendar year is normally distributed with a mean of 1% of assets per year and the standard deviation of 2% of assets per year. (a) (6 points) How much equity (as a percentage of assets) does the company currently need to have in order to be 99% sure that its equity will not fall below 5% of its assets at the end of two years. (b) (4 points)If the company currently has equity that is 3% of its assets, what is the probability that all of its equity will be wiped out at the end of three years? Ignore taxes. Remember to show your work

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