When Risk-Taking Is Not Actuarially Fairly Priced into Deposit Insurance

question 46

Multiple Choice

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 DTIs to take additional risk.
• C)deposit insurance premiums are more costly than economically justified.
• D)depositors will be unprotected should the DTI become insolvent and fail.
• E)the insurance provider is forced to find other sources of funds to continue coverage for the institution.

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Definitions:

Diagnosis

The process of identifying a disease, condition, or injury from its signs and symptoms by a health professional.

DSM-5 Category

A classification found within the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, which is used by healthcare professionals to diagnose and classify mental disorders.

Intrusive Thoughts

Unwanted and often distressing thoughts or images that spontaneously appear in a person's mind.

Flashbacks

The sudden and intense re-experiences of past memories or events, often occurring in individuals with PTSD.