Consider two local stores. Store A has 96 loans outstanding, each for $1.0 million, that it expects will be repaid today. Each loan has a 6%

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

$96 million outstanding, which it also expects will be repaid today. It also has a 6% probability of not being repaid. Calculate the following:

a. The expected overall payoff of each store.

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