b) Suppose that your bank is considering investing in a one-year project. The investment willcost $10 million and has an 80% chance of generating $19 million income, a 10% chanceof generating $13 million income, a 7% chance of generating $8 million income and a 3%chance of generating nothing.i) Illustrate the cumulative probability distribution for this project's gains and losses[Feel free to draw the distribution by hand and paste a picture of it].ii) What is the one-year VaR for the project when the confidence level is 95%. Whatdoes it mean?iii) What is the Expected Shortfall (ES) when the confidence level is 95%?iv) What information does the Expected Shortfall measure provide which the VaRdoes not?

“Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Answered: b) Suppose that your bank is…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Please do question 1f and 1g handwritten
The Business School at State University currently has three parking lots, each containing 155 spaces. Two hundred faculty members have been assigned to each lot. On a peak day, an average of 70% of all lot 1 parking sticker holders show up, an average of 72% of all lot 2 parking sticker holders show up, and an average of 74% of all lot 3 parking sticker holders show up. a. Given the current situation, estimate the probability that on a peak day, at least one faculty member with a sticker will be unable to find a spot. Assume that the number who show up at each lot is independent of the number who show up at the other two lots. Compare two situations: (1) each person can park only in the lot assigned to him or her, and (2) each person can park in any of the lots (pooling). (Hint: Use the RISKBINOMIAL function.) If needed, round your answer to a whole percentage and if your answer is zero, enter "0". No pooling: Pooling: 51.4 % 83.8 % b. Now suppose the numbers of people who show up at…
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