We assume two people having same distribution. For these people, we assume also that losses are uncorrelated Outcome Probability Loss 10,000 dollars 0.05 0 0.95 1. Explain risk pooling and give its main purpose 2. Calculate the expected value 3. Calculate the variance and Standard deviation Probability 4 We assume a new distribution of costs (Pooling with 2 people) Loss to Outcomes Neither O dollars 5,000 Bob 5,000 Both 10,000 a. Complete the table above b. Calculate the expected value Ved Standam a. Complete the table above b. Calculate the expected value c. Calculate Variance and Standard deviation d. Compare between results of question 3. Interpret S. We assume 4 people having same distribution, The pooling arrangement between 4 people is given as following Outcome Probability $10,000 0.000006 Loss $7,500 0.000475 $5,000 0.014 $2.500 0.171 SO 0.815 a Calculate the Expected value b. Calculate variance and Standard deviation c. Compare your results to those of question 3 and 4(e). Interpret your results