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

question 93

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 expected overall payoff to Bank B is:

• A)$5,000,000.
• B)$6,000,000.
• C)$94,000,000.
• D)$95,000,000.

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Definitions:

Drug Use

The consumption of substances for medical or recreational purposes, which can impact health positively or negatively depending on the context.

Healthy Diet

Eating patterns that include a variety of nutritious foods in the right quantities to maintain health, vitality, and overall wellbeing.

Whole Grains

Foods that contain all the essential parts and naturally-occurring nutrients of the entire grain seed, such as wheat, rice, oats, and barley.

Sugary Foods

Foods high in sugar content, which can contribute to various health issues when consumed in excess.