Consider two local banks. Bank A has 94 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 $ 94 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. Get Finance Help Today
You may clearly understand what an essay is and have had the experience of writing a number. However, it is […]
The day inevitably comes; you need to submit your assignment. You have been procrastinating on writing your paper until the […]
Choosing a paper topic can be a daunting task for any assignment. A student may face agony trying to come […]
The media is an integral part of modern society. Think of what would happen to the world if there were […]
A hypothesis is a statement that can be proven by scientific research. It proves the theory of action and reaction, […]