elt default swapcan be settled. (5 points) dbshe information below to calculate the Altman's Z score and interpret the Z score in terms of bankruptcy prediction (15 points) 1. Earnings Before Interest & . 1600 2. 23350 3. 4000 4. 3900 s. 15000 6. 9500 7. 9600 8. 2350 Taxes EBIT 2 Total Assets 3. Net Sales 4. Market Value of Equity s. Total Liabilities 6. Current Assets 7. Current Liabilities s. Retained Earnings Q.2. a) Explain how margins protect investors against the possibility of default. (5 points) b) An investor buys $8,000 worth of a stock priced at $40 pershare using 50% initial margin. The broker charges 6% on the margin loan and requires a 30% maintenance margin. In 1 year the investor has interest payable and gets a margin call. At the time of the margin call the stock's price must have been--?-. (15 points) Q.3 a) Describe alternative ways to estimate the probability of company defaulting on its obligations over the next three years. (5 points) b) A bank paid $2.5 million in interest to its depositors this year. To get a net interest minimum amount of interest income a bank needs to generate if t has made loans equal to $100 million this year?(5 margin of 3%, what is the points) Q.4.a) if interest rates were at 7 percent, a 3-year bond with a 10 percent coupon paid annually would sell for how much today? (5 points) b) Using Maculary duration method, calculate the duration of the bond in Q.4.a (10 points) b) The management of the net interest income is one of main component of risk management activity of the banks. Example with the help of an example how does the banks control the fluctuations in net interest margins? (5 points)