Use the Following Information to Answer the Problem(s)below

question 100

Multiple Choice

Use the following information to answer the problem(s) below.
Consider two banks.Bank A has 1000 loans outstanding each for $100,000,that it expects to be fully repaid today.Each of Bank A's loans have a 6% probability of default,in which case the bank will receive $0 for each of the defaulting loans.Bank B has 100 loans of $1 million outstanding,which it also expects to be fully repaid today.Each of Bank B's loans have a 5% probability of default,in which case the bank will receive $0 for each of the defaulting loans.The chance of default is independent across all the loans.
-The standard deviation of the overall payoff to Bank A is closest to:

• A)$689,000.
• B)$751,000.
• C)$2,179,000.
• D)$2,375,000.

---

Definitions:

Comfortable Bed

A bed that provides adequate support and softness to ensure a good night's sleep, contributing to physical and mental well-being.

People Sleep

A necessary biological process for humans, involving resting states where consciousness is suspended and the body can repair and regenerate.

Be Conscious

To be aware of one's own existence, sensations, thoughts, and surroundings.

White Wall

A structural barrier painted or finished in white, often used as a simplistic and clean background or space delimiter.