Question: Which statement regarding the deposit insurance is NOT true? a. A well-designed deposit insurance scheme can prevent bank runs. b. Insured depositors lack incentives to

Which statement regarding the deposit insurance is NOT true?

a.

A well-designed deposit insurance scheme can prevent bank runs.

b.

Insured depositors lack incentives to differentiate between good vs bad banks.

c.

Deposit insurance will encourage the management and shareholders of banks to manage liquidity risk more prudently.

d.

Deposit insurance allows wealthy investors to spread their wealth in different categories.

e.

Both b and c

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