The existence of deposit insurance can increase the likelihood that depositors will need deposit protection,as banks with deposit insurance
A) are likely to take on greater risks than they otherwise would.
B) are likely to be too conservative,reducing the probability of turning a profit.
C) are likely to regard deposits as an unattractive source of funds due to depositors' demands for safety.
D) are placed at a competitive disadvantage in acquiring funds.
Correct Answer:
Verified
Q1: In May 1991,the FDIC announced that it
Q2: During the boom years of the 1920s,bank
Q3: Moral hazard is an important concern of
Q5: Although the FDIC was created to prevent
Q6: Because of asymmetric information,the failure of one
Q7: Deposit insurance has not worked well in
Q8: Acquiring information on a bank's activities in
Q9: To prevent bank runs and the consequent
Q10: A system of deposit insurance
A)attracts risk-taking entrepreneurs
Q11: Depositors lack of information about the quality
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents