As the population in the risk pool grows larger, the variance in the mean loss approaches
A) positive infinity
B) zero
C) negative infinity

Question

Quizplus · Accepted Answer

This is due to the law of large numbers, which states that as the sample size increases, the sample mean will approach the population mean. Therefore, as the population in the risk pool grows larger, the variability in the mean loss will decrease and approach a more stable value, leading to a variance of zero.

As the Population in the Risk Pool Grows Larger, the Variance