Final answer:
Colorado would have up to $250,000 covered by deposit insurance if Big Bucks Bank were to fail, as the FDIC insures deposits up to $250,000 since 2008.
Step-by-step explanation:
The question revolves around understanding deposit insurance and its implications in the event of a bank failure. Colorado had money in a Certificate of Deposit (CD) at Big Bucks Bank, and if the bank were to go bankrupt, the Federal Deposit Insurance Corporation (FDIC) would cover the deposits up to a certain amount.
As per the information given, deposit insurance guarantees the safety of a depositor's accounts up to $250,000 since the limit was increased from $100,000 to $250,000 in 2008.
Therefore, if Big Bucks Bank were to fail, Colorado would be able to recover up to $250,000 through the FDIC. Based on the provided choices, the maximum insured amount under the FDIC is $250,000, which is the amount Colorado would have covered in the CD at Big Bucks Bank should the bank fail
Therefore, option C the correct answer.