Which of the following statements best describes the law of large numbers?
A) Large numbers of people should be involved if a gamble has to be successful.
B) Risk involved in a gamble is low when the money invested in it is large.
C) The mean return will get closer and closer to its expected value the more times a gamble is repeated.
D) Risk involved in a gamble is low when the prize is large.

Question

Quizplus · Accepted Answer

The law of large numbers states that as the number of trials or repetitions of an experiment increases, the mean of the results will approach the expected value. This means that random outcomes will become more predictable and follow a pattern as the sample size increases. A and D are incorrect because the law of large numbers does not pertain to the success or risk involved in a gamble based on the number of people or the size of the prize. B is incorrect because the law of large numbers does not guarantee low risk, even with a large investment.

Which of the Following Statements Best Describes the Law of Large