Question: Suppose sam and jack each separately faces the same exact loss distribution, as follows: Probability of Outcomes PROBABILITY $0 0.8 $3,000 0.2 What is the

Suppose sam and jack each separately faces the same exact loss distribution, as follows:

Probability of Outcomes

PROBABILITY

$0

0.8

$3,000

0.2

What is the standard deviation per person if Sam and Jack pool risk together and each pays half whenever the other one experiences a loss?

  1. $849

  2. $1169

  3. $904

  4. $1035

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