Consider two local banks. Bank A has 92 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 $92 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.

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Part 1

a. The expected overall payoff of each bank.

The expected overall payoff of Bank A is $89.289.2

million. (Round to the nearest integer.)

Part 2 The expected overall payoff of Bank B is

$89.289.2 million. (Round to the nearest integer.)

Part 3

b. The standard deviation of the overall payoff of each bank.

The standard deviation of the overall payoff of Bank A is

enter your response here.

(Round to two decimal places.

Bank B?