Insurance Companies Utilize the Law of Large Numbers to Reduce

question 66

True/False

Insurance companies utilize the law of large numbers to reduce the chance of loss for their insureds.

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Definitions:

Efficient Allocation

The optimal distribution of resources among different entities to maximize productivity or satisfaction without waste.

Income Disparities

The difference in earnings among individuals or groups in the economy, often causing economic inequality.

Government Intervention

Actions by a government to affect the economy, often aiming to correct market failures or promote social welfare.

Imperfect Information

A market condition where all parties do not have equal access to all relevant information.