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Assume that you are a member of the asset-liability management (ALM) committee of PMK Bank....

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Assume that you are a member of the asset-liability management (ALM) committee of PMK Bank. You have collected following information, based on which you are requested to write a short report to the committee comparing the probability of book value insolvency of PMK Bank with the competitor PTY Bank. PMK Bank PTY Bank 0.15 -0.10 Expected return on assets Total equity (in millions) Total liabilities in millions) 15 18 105 90 Variance of ROA 0.005 0.002

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