Under the Option Pricing Model of Deposit Insurance, the Cost

Multiple Choice

Under the option pricing model of deposit insurance, the cost of the insurance

A) decreases as the insured deposit base increases.
B) decreases as the period over which the insurance coverage extends is increased.
C) increases with the level of risk of the assets held by the DI increase.
D) decreases with market interest rates.
E) increase as the level of leverage used by the DI decreases.