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Describe the differences between the four categories of risk

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1. Define and describe the differences between the four categories of risk found in an ERM program. Provide at least one example for each type.

2. Insurers combine many exposure units in the process of risk pooling. Describe the effect of increasing the size of the risk pool on the mean loss of the pool and on the standard deviation of the mean loss in the pool. In your answer, assume that the losses of all the exposure units in the pool are independent and homogeneous.

Reference no: EM133177538

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