Why Is a Large Number of Exposure Units Generally Required

question 64

Multiple Choice

Why is a large number of exposure units generally required for a risk to be insurable?

• A) It prevents the insurer from losing money.
• B) It guarantees that losses will be unintentional and measurable.
• C) It enables the insurer to better predict the frequency and severity of losses (moderate).
• D) It minimizes physical hazards.

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Definitions:

Cultural Relevance

The degree to which something is meaningful and applicable within a specific cultural context.

Correlational Data

Information that shows the relationship or association between two or more variables, without necessarily indicating causation.

Genetic Influence

The impact of inherited genetic factors on an individual's physical, behavioral, and personality traits.

Symbolic Thinking System

The cognitive ability to use symbols, language, or pictures to represent something that is not physically present.