1. Which of the following is a basic characteristic of insurance? A- Pooling of losses B-Avoidance of risk C. Payment of intentional losses D. Certainty about specifie losses that will occur 2. Which of the following is implied by the pooling of losses? A- Sharing of losses by an entire group B-Inability to predict losses with any degree of accuracy C. Substitution of actual loss for average loss D- Increase of objective risk 3. From the viewpoint of the insurer, all of the following are characteristics of an idcally insurable risk EXCEPT A - The loss must be accidental. B - The loss should be catastrophic. C- The premium must be cconomically feasible. D.-Thore must be a large number of exposure units. 4. Why is a large number of exposure units generally required before a pure risk is insurable? A- It prevents the insurer from losing money. B- It eliminates intentional losses. C-It minimizes moral hazard. D- It enables the insurer to predict losses more accurately. 5. According to the law of large numbers, what happens as the number of exposure units increases? A-Actual results will increasingly differ from probable results. B- Actual results will more closely approach probable results. C- No diversifiable risk will decrease. D. Objective risk will increase