1. If you expect to have only three losses per year on average (called frequency) for a total of $10,000 each (called loss severity), what will be the cost of sharing these losses per student in the class?

2. Cameron was asked by a classmate how could this be so cheap? He explained that this experiment would not emulate an insurance company and the system will only assess the participants an equal amount of losses at the end of the year. If you join the class and pay the $300.00 premium, what is your risk with the class that you do not have with an insurance company?

3. We learned about the importance of large numbers of people insured for insurance to work. Do you think the class has enough exposures to predict only three losses a year? Explain.