Which of the Following Is NOT a Potential Problem Due

Multiple Choice

Which of the following is NOT a potential problem due to federal depository insurance?

A) Banks have an incentive to make riskier loans than they would otherwise.
B) Depositors have little incentive to monitor the behavior of the managers of the depository institutions.
C) Depositors demand greater interest rates on their deposits to compensate them for the riskier behavior of the managers of the depository institutions.
D) Lenders have less incentive to investigate the credit-worthiness of borrowers.