Which of the following statements is true of pooling arrangements? A. They result in overall risk...

Which of the following statements is true of pooling arrangements?

A. They result in overall risk reduction for each individual participant in the pool.

B. They increase the risk for each individual participant in the pool.

C. They result in overall risk reduction for selected participants in the pool.

D. They increase the risk for selected participants in the pool.

Solutions

Expert Solution

Pooling arrangement allow participants to split the over all risk equal. So if there are 10 people in the group and there is a risk of £100 then each individual will have risk of £10 which is less if a single individual have to face the risk of £100

so the right answer is A

A. They result in overall risk reduction for each individual participant in the pool.

jeff jeffy answered 1 year ago

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