If deposits are uninsured, what is the probability of bank failure in an economy with N = 10? Is deposit insurance good for bank stability?

a) The probability depends on the specific model and parameters used in the analysis. Deposit insurance can be beneficial but its effectiveness depends on various factors.
b) Yes, the probability of bank failure is 2. 08%. Deposit insurance is crucial for bank stability.
c) No, deposit insurance does not impact bank stability significantly.
d) The probability of bank failure cannot be determined without additional information.