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.

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Definitions:

Receiver/Dryer

A component in a vehicle's air conditioning system that removes moisture from the refrigerant and acts as a storage tank for the refrigerant when the system is not in use.

Passenger Compartment

The area of a vehicle designed to accommodate passengers, excluding the trunk or cargo space.

Boiling Point

The temperature at which a liquid turns into vapor at a given pressure.

Output Speed

Refers to the speed at which a machine or a part of it, such as an engine or drive shaft, delivers power.