According to the law of large numbers, as the number of insureds increases, risk is reduced. However,
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According to the law of large numbers, as the number of insureds increases, risk is reduced. However, as an insurance company writes more policies, it exposes itself to the potential for greater insured losses, which is riskier. Explain this apparent contradiction.
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The Law of Large Numbers provides that as the number of insured risks increases deviation between ac...View the full answer
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Related Book For
Financial Institutions, Markets and Money
ISBN: 978-1119330363
12th edition
Authors: David S. Kidwell, David W. Blackwell, David A. Whidbee, Richard W. Sias
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