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Consider two local banks. Bank A has 1 0 0 loans outstanding, each formillion, that it expects will be repaid today. Each loan has aprobability
Consider two local banks. Bank A has loans outstanding, each formillion, that it expects will be repaid today. Each loan has aprobability of default, in which case the bank is not repaid anything. The chance of default is independent across all the loans. Bankhas only one loan ofmillion outstanding, which it also expects will be repaid today. It also has aprobability of not being repaid. Calculate the following: a The expected overall payoff of each bank. b The standard deviation of the overall payoff of each bank. a The expected overall payoff of each bank. The expected overall payoff of Bankismillion. Round to the nearest integer. The expected overall payoff of Bankismillion. Round to the nearest integer. b The standard deviation of the overall payoff of each bank. The standard deviation of the overall payoff of Bank A isRound to two decimal places. The standard deviation of the overall payoff of Bank B isRound to two decimal places.
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