Risk Pooling Is the Ability to Reduce the Risk of a Unit

question 29

True/False

Risk Pooling is the ability to reduce the risk of a unit by making more accurate predictions about a large pool of units.

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Definitions:

Legal Consideration

An essential element of a contract, referring to something of value promised to another when making an agreement.

Contract Was Formed

A statement indicating that an agreement meeting all legal requirements for enforceability (offer, acceptance, consideration) has been successfully established between parties.

Consideration Requirement

A fundamental principle in contract law that requires both parties involved in a contract to exchange something of value for the agreement to be legally binding.

Legal Value

Consideration or a benefit recognized by the law that supports a contract's enforceability.