Here is an example of deposit insurance & bank risk-taking :
1.• What is the expected payoff of each project?
2 • If deposits are 40, which project maximizes shareholder value?
- If there is a deposit insurance
- If there is no deposit insurance
3 • What if deposits are 20? What is the leverage of the bank?
I only need help on the final (3rd) question please. Thank you in advance