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

question 95

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 A is:

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

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Definitions:

Affect

A broad range of feelings that individuals experience, encompassing both emotions and moods.

Attitude Object

Any entity that is the focus of an individual's attitude, including people, products, or concepts.

Zajonc's Hierarchy

A theory that proposes the sequence of cognitive processes involved in the appraisal of stimuli, emphasizing the primacy of affective responses over cognitive evaluations.

Effects Model

A model or theory in the fields of psychology or communication that describes the potential impacts of media and messages on individuals or societies.