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.

---

Definitions:

Drainage Collection Unit

A device or system used in medical settings to collect fluids that drain from a patient's body.

Ambulates

The action of walking or moving from one place to another, often used in medical contexts to assess mobility.

Hemothorax

The accumulation of blood in the pleural cavity, which is the space between the lungs and the chest wall, often resulting from injury or trauma.

Water-Seal Chamber

A part of a chest drainage system that prevents air from re-entering the chest cavity while allowing gases to escape from a pleural space.