If Insurers Didn't Practice Pooling, What Would Happen

question 38

Multiple Choice

If insurers didn't practice pooling, what would happen?

• A) They would save a lot of time and money by not having to do difficult calculations.
• B) They would make a handsome profit since they would get to sell a lot of insurance to a lot of people.
• C) The insurance mechanism would become unfeasible.
• D) The insurance mechanism would become the largest money-making venture in the United States.

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Definitions:

Central Tendency

A statistical measure that identifies the center of a data set, often using the mean, median, or mode.

Variation

Differences or diversities in characteristics among individuals of a population, species, or between groups.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values.

Mean Age

An arithmetic average age of all the individuals in a given group or sample.