Answered step by step
Verified Expert Solution
Question
1 Approved Answer
An insurance company's policies were used to demonstrate the principle of risk pooling and risk sharing. Based on this example, select the true statement (
An insurance company's policies were used to demonstrate the principle of risk pooling and risk sharing. Based on this example, select the true statements
about risk pooling from those sentences presented below.
As more policies are added to the insurer's pool, each investor's exposure to any single policy shrinks.
The law of averages does work provided the insurance policies are diversified across many sources of rissk.
Risk sharing and risk pooling are two independent strategies for reducing risk.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started