Question: Please answer question B for both banks A and B. Thank you! Consider two local banks. Bank A has 91 loans outstanding, each for $1.0

Please answer question B for both banks A and B. Thank you!

Consider two local banks. Bank A has 91 loans outstanding, each for $1.0 million that it expects will be repaid today. Each loan has a 7% 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 $91 million outstanding, which it also expects will be repaid today. It also has a 7% 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 $ 84.63 milion (Round to the nearest integer) The expected overalt payoff of Bank Bis $ 84.63 million. {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 As (Round to two decimal places)

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