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Find objective risk as a result of the pooling

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Two shops are owned by two business owners who are brothers valued at BD 3,000. It was estimated that there is a 5 percent chance in any year that each delivery truck will be damaged due to either collision or wear and tear. (loss to either of the delivery truck are independent). The brothers decided to share the risk and agree to pay equal amount of share in case of a loss. Requirements; -Use appropriate technique to determine the expected loss for each of the parties involved and the objective risk as a result of the pooling.

Reference no: EM133275499

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