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    Business
  3. Study Set
    Financial Institutions Management
  4. Exam
    Exam 20: Deposit Insurance and Other Liability Guarantees
  5. Question
    The Use of the Option Pricing Model to Determine the Actuarially
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The Use of the Option Pricing Model to Determine the Actuarially

Question 73

Question 73

True/False

The use of the option pricing model to determine the actuarially fair premium for deposit insurance indicates that the cost of the insurance should rely on both the asset size and level of leverage of the DI.

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