Pooling the exposures together permits less accurate statistical prediction of future losses.

Name: Pooling the exposures together permits less accurate statistical prediction of future losses.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Pooling exposures together allows for more accurate statistical predictions of future losses because it relies on the law of large numbers, which states that the larger the group of units, the more predictably they behave as a whole.

Pooling the Exposures Together Permits Less Accurate Statistical Prediction of Future