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please find the standard deviation for bank A and bank B Consider two local banks. Bank A has 90 loans outstanding, each for $0.9 milion,
please find the standard deviation for bank A and bank B
Consider two local banks. Bank A has 90 loans outstanding, each for $0.9 milion, that it expects will be repaid today. Each loan has a 4% probability of default, in which case the bank is not repaid anything. The chance of defautt is independent across all the loans. Bank B has only one loan of $81 milion outstanding, which it also expects will be repaid today. It also has a 4% 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 \$ million. (Round to two decimal places.) The expected overall payoff of Bank B is $ milion. (Round to two decimal places.) b. The standard deviation of the overall payoff of each bank. The standard deviation of the overall payoff of Bank A is $ million. (Round to four decimal places.) Step by Step Solution
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