Question: Bill and Ginny have the same loss distribution: Loss = $0 with probability .60 Loss = $10 with probability .40 Expected loss for the distribution:

Bill and Ginny have the same loss distribution:

Loss = $0 with probability .60

Loss = $10 with probability .40

Expected loss for the distribution: $4

Standard deviation for the distribution: $4.899

** HELP WITH THIS PART ** Now, Bill and Ginny agree to pool losses. This means that if there is a loss to either one of them, then they each will pay half of the loss (i.e., they will split all losses in the pool equally). What is the changed probability distribution of losses for each person now?

Find expected loss with pooling.

Find standard deviation with pooling.

If another person joined the pool, what we would expect to happen to risk?

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