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# The government provides insurance for individuals bank

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Manager
Joined: 31 Mar 2006
Posts: 66

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The government provides insurance for individuals bank [#permalink]

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15 Apr 2006, 08:03
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The government provides insurance for individualsâ€™ bank deposits, but requires the banks to pay the premiums for the insurance. Since it is depositors who primarily benefit from the security this insurance provides, the government should take steps to ensure that depositors who want this security bear the cost of it and thus should make depositors pay the premiums for insuring their own accounts.

Which of the following is assumed by the argument?

(A) Banks are not insured by the government against default on the loans the banks make.

(B) Private insurance companies do not have the resources to provide banks or individual with deposit insurance.

(C) Banks do not always cover the cost of the deposit-insurance premiums by paying depositors lower interest rates on insured deposits than the banks would on uninsured deposits.

(D) The government limits the insurance protection it provides by insuring accounts up to a certain legally defined amount only.

(E) The government does not allow banks to offer some kinds of accounts in which deposits are not insured.

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Intern
Joined: 04 May 2004
Posts: 47

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Location: India

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15 Apr 2006, 08:46
E?
_________________

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Senior Manager
Joined: 22 Nov 2005
Posts: 474

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15 Apr 2006, 09:58
antiant wrote:
The government provides insurance for individualsâ€™ bank deposits, but requires the banks to pay the premiums for the insurance. Since it is depositors who primarily benefit from the security this insurance provides, the government should take steps to ensure that depositors who want this security bear the cost of it and thus should make depositors pay the premiums for insuring their own accounts.

Which of the following is assumed by the argument?

(A) Banks are not insured by the government against default on the loans the banks make.

(B) Private insurance companies do not have the resources to provide banks or individual with deposit insurance.

(C) Banks do not always cover the cost of the deposit-insurance premiums by paying depositors lower interest rates on insured deposits than the banks would on uninsured deposits.

(D) The government limits the insurance protection it provides by insuring accounts up to a certain legally defined amount only.

(E) The government does not allow banks to offer some kinds of accounts in which deposits are not insured.

C is the correct answer. Arguments talks about the cost of the insurance. stem
C clealy asssumes that banks do not always covers cost of insurance thats why depositors should pay for insurance.

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Manager
Joined: 28 Mar 2006
Posts: 157

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15 Apr 2006, 11:45
Go with C.....it is assumed that customers havent paid nethng for the insurance facility..so they need to pay...
Gud explanation gmat_crack !

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Intern
Joined: 18 Feb 2006
Posts: 9

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Location: Zurich

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15 Apr 2006, 14:27
I think that E is the correct answer

antiant wrote:
The government provides insurance for individualsâ€™ bank deposits, but requires the banks to pay the premiums for the insurance. Since it is depositors who primarily benefit from the security this insurance provides, the government should take steps to ensure that depositors who want this security bear the cost of it and thus should make depositors pay the premiums for insuring their own accounts.

Which of the following is assumed by the argument?

(A) Banks are not insured by the government against default on the loans the banks make.

(B) Private insurance companies do not have the resources to provide banks or individual with deposit insurance.

(C) Banks do not always cover the cost of the deposit-insurance premiums by paying depositors lower interest rates on insured deposits than the banks would on uninsured deposits.

(D) The government limits the insurance protection it provides by insuring accounts up to a certain legally defined amount only.

(E) The government does not allow banks to offer some kinds of accounts in which deposits are not insured.

Kudos [?]: [0], given: 0

Manager
Joined: 31 Mar 2006
Posts: 66

Kudos [?]: 48 [0], given: 0

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15 Apr 2006, 17:59
yeah, right.

If I read C, I think it's right definitely. But I answered A in the beginning.

What if banks are insured by the government against default on the loans the banks make? Does this weaken the logic?

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Manager
Joined: 08 Feb 2006
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16 Apr 2006, 02:17
C for me

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VP
Joined: 29 Apr 2003
Posts: 1402

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16 Apr 2006, 02:34
Okay last one for the day.. Mark me down for C!

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Manager
Joined: 20 Feb 2006
Posts: 214

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16 Apr 2006, 08:14
Me too for C.

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Senior Manager
Joined: 07 Mar 2006
Posts: 351

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16 Apr 2006, 09:09
I'll too will go with 'C'.

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16 Apr 2006, 09:09
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# The government provides insurance for individuals bank

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