Which of the Following Statements About the Confidence Interval Is

question 21

Multiple Choice

Which of the following statements about the confidence interval is not correct?

• A) A confidence interval is based on the outcomes of the probability distribution.
• B) A confidence interval is calculated by adding and subtracting the standard deviation to/from the estimate of mean expected loss.
• C) A confidence interval tells the insurer something about the size of the risk pool.
• D) A confidence interval tells the insurer something about how much money it needs to cover potential losses.

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Definitions:

Artificial Differences

Distinctions made based on non-natural or synthetic criteria, often leading to unnecessary or unfounded separation between groups or categories.

Advertising

The action or profession of producing advertisements for commercial products or services to influence consumer behaviors.

Network Externalities

The value of a product to a consumer increases with the number of that product being sold or used in the market.

Product Variety

The range of different products or services offered by a company or available in a market.