What is the expected overall payoff of bank

Assignment Help Finance Basics
Reference no: EM133073969

Consider two local banks. Bank A has 93 loans? outstanding, each for? $1.0 million, that it expects will be repaid today. Each loan has a 4% probability of? default, in which case the bank is not repaid anything. The chance of default is independent across all the loans. Bank B has only one loan of $93 million? outstanding, which it also expects will be repaid today. It also has a 4% probability of not being repaid. Calculate the? following:

a. What is the expected overall payoff of each bank.

b. What is the standard deviation of the overall payoff of each bank.

Reference no: EM133073969

Questions Cloud

M21388 Introduction to Analogue Circuits Assignment : M21388 Introduction to Analogue Circuits Assignment Help and Solution, University of Portsmouth - Assessment Writing Service
What is the implied market capitalization rate : The dividends are expected to grow at a rate of 6% annually. If the current stock price is $60/shr, what is the implied market capitalization rate?
What was the total amount of expenses : What was the total amount of expenses related to the firm's research and development activities during fiscal year 2017
How much will be repaid in seven ?years : Bill deposits?$ 8300with his credit union in an account paying 6?% compounded semi-annually. How much will be repaid in 7 ?years
What is the expected overall payoff of bank : Consider two local banks. Bank A has 93 loans? outstanding, each for? $1.0 million, that it expects will be repaid today. Each loan has a 4% probability of? def
What would be the value of one right : Boles Bottling Co. has issued rights to its shareholders. The subscription price is $72 and six rights are needed along with the subscription price to buy one o
How much will audrey balloon payment be in eight years : Mary has just arranged to purchase a $450,000 vacation home in the Hawaii with a 20 percent down payment. The mortgage has a 7.5 percent stated annual interest
Report with respect to myob essentials : Mr. Ponsford would like you to write him a Report with respect to MYOB Essentials, which discusses the features of the following 5 business Cloud based Software
Determine the operating income for department b : Determine the operating income for department B, assuming department A "sold" department B 1,000 units during the month

Reviews

Write a Review

Finance Basics Questions & Answers

  Present value of an uneven stream of payments?

You are given three investment alternatives to analyze. The cash flows from these three investments are as? follows:

  Achieve a turnover comparable to the industry average

What would the reduction in inventory if this firm were to achieve a turnover comparable to the industry average?

  What is the value of the investor position

Suppose the one month rate of interest is 6%. What is the value of the investor's position?

  What is the combined present value of cash flows

If interest rates are 10 percent per year, what is the combined present value of these cash flows?

  Calculate ergons stock price

Ergon's cost of equity is 15% and it has 25 million shares outstanding. Calculate Ergon's stock price.

  Calculate the account balance six months from today

Question 1: Calculate the account balance six months from today. Question 2: Calculate the account balance 6 years from today.

  Both the genesis and sensible essentials teams believe that

both the genesis and sensible essentials teams believe that the client engagement was very successful. all the critical

  Amount of the last dividend company paid

The stock sells for RM28.40 a share at a required return of 14 percent. Calculate the amount of the last dividend this company paid.

  Create the pro forma cash flow statement

When getting into a project of this type you generally consider a 5-year holding period and look for a 12% rate of return.

  Initial assumptions regarding the indifference curve

Your client asks why you would combine Portfolio (A), which has a lower Sharpe ratio, with Portfolio (B), which has a higher Sharpe ratio

  Differences between managing local and virtual teams

Write a paper of no more than 1,750 words, identifying at least six best practices for acquiring, developing, and managing high-performance project teams. Address similarities and differences between managing local and virtual teams. Analyze best ..

  What is the beta on a stock with an expected return

Consider the CAPM. The risk-free rate is 5%, and the expected return on the market is 7%. What is the beta on a stock with an expected return of 9%?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd