Question: Please round the expected overall payoffs to the nearest integer, and the standard deviation of both banks to two decimal places. Consider two local banks.

Please round the expected overall payoffs to the nearest integer, and the standard deviation of both banks to two decimal places.

Please round the expected overall payoffs to the nearest integer, and the

Consider two local banks. Bank A has 82 loans outstanding, each for $1.0 million, that it expects will be repaid today. Each loan has a 5% 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 $82 million outstanding, which it also expects will be repaid today. It also has a 5% 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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