in Finance by (62.1k points)

Question: According to the law of large numbers, which of the following is true as the number of exposures increases?

Options:

  1.  Future risk will increase
  2.  Actual results will more closely approximate probable results
  3.  Pure risk will increase
  4.  Speculative risk will decrease
  5.  The chance of loss decreases

Please log in or register to answer this question.

1 Answer

+1 vote
by (247k points)
selected by
 
Best answer

2. Actual results will more closely approximate probable results

According to the law of large numbers, Actual results will more closely approximate probable results as the number of exposures increases.


Explanation:

Law of large numbers state that the result will be more accurate when the number of exposures increases. The inaccuracy in data collected will be reduced and get closes to actual result.

Related questions

...