According to the law of large numbers,what happens as the number of exposure units increases?
A)Actual results will increasingly differ from probable results.
B)Actual results will more closely approach probable results.
C)Nondiversifiable risk will decrease.
D)Objective risk will increase.

Question

Quizplus · Accepted Answer

The law of large numbers states that as the number of exposure units increases, the actual results will more closely approach probable results. This means that the larger the sample size or the more exposure units there are, the more accurate the predictions will be. As a result, insurers use this principle to reduce risk and make more accurate predictions about losses.

According to the Law of Large Numbers,what Happens as the Number