Consider two local banks. Bank A has

76

loans outstanding, each for $1.0 million, that it expects will be repaid today. Each loan has a

3%

probability of default, in which case the bank is not repaid anything. The chance of default is independent across all the loans. Bank B has only one loan of

$76

million outstanding, which it also expects will be repaid today. It also has a

3%

probability 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 Bank A is

$nothing

million. (Round to the nearest integer.)

Consider two local banks. Bank A has 76 loans outstanding, each for $1.0 million, that it expects will be repaid today. Each loan has a 3% probability of default, in which case the bank is not repaid anything. The chance of default is independent across all the loans. Bank B has only one loan of $76 million outstanding, which it also expects will be repaid today. It also has a 3% probability 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 Bank Ais $ million. (Round to the nearest integer.) Consider two local banks. Bank A has 76 loans outstanding, each for $1.0 million, that it expects will be repaid today. Each loan has a 3% probability of default, in which case the bank is not repaid anything. The chance of default is independent across all the loans. Bank B has only one loan of $76 million outstanding, which it also expects will be repaid today. It also has a 3% probability 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 Bank Ais $ million. (Round to the nearest integer.)