What happens to the pooling effect

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Reference no: EM131878364

1. If the individual standard deviation of a group of geographically dispersed and like auto drivers is $2,500, what would happen to the individual standard deviation if 16 of the auto drivers formed a risk sharing (pool)? The individual standard deviation would be?

A. Increase to $10,000

B. Decrease to $625

C. Increase to $40,000

D. Decrease to $156

2. What happens to the pooling effect if exposures are no longer independent? The pooling effect is,

a. the same b. greater c. less d. correlated

Reference no: EM131878364

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