Find the expected loan payment

Reference no: EM131805442

You work for the loan department of a large bank.

You know that one of your customers has been having trouble with the recession and may not be able to make the loan payment that is due next week.

You believe there is a 60% chance that the payment of $50,000 will be made in full, a 30% chance that only half will be paid, and a 10% chance that no payment will be made at all.

a. Find the expected loan payment.

b. Find the degree of risk for this situation.

Reference no: EM131805442

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