1. Explain each of the following characteristics of a typical insurance plan. a. Pooling of losses b. Payment of fortuitous losses c. Risk transfer d. Indemnification 2. Explain the law of large numbers. 3. Pure risks ideally should have certain characteristics to be insurable by private insurers. List the six characteristics of an ideally insurable risk. 4. Why are most market risks, financial risks, production risks, and political risks considered difficult to insure by private insurers? 5. What is the meaning of adverse selection? Identify some methods that insurers use to control for adverse selection. 6. Compare the risks of (i) fire with (ii) war in terms of how well they meet the requirements of an ideally insurable risk. 7. Describe the steps in the risk management process. 8. Explain the following risk-control techniques a. Avoidance b. Loss Prevention c. Loss Reduction d. Duplication e. Seperation