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Question
When risk-taking is not actuarially fairly priced into deposit insurance premiums
A. depositors are required to pay the shortfall in funds collected.
B. there is an increase in the incentives for owners of DIs to take additional risk.
C. deposit insurance premiums are more costly than economically justified.
D. depositors will be unprotected should the DI become insolvent and fail.
E. the insurance provider is forced to find other sources of funds to continue coverage for the institution.
Answer
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