It Is Better to Pool Risks Because You Can

question 5

Multiple Choice

It is better to pool risks because you can:

• A)increase your income.
• B)reduce your expected income but increase its standard deviation.
• C)reduce the variability of expected income.
• D)increase your expected income.

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Definitions:

Fee Simple Absolute

Fee simple absolute is the most complete form of ownership of real estate, providing unlimited control subject to government restrictions and commitments.

Unconditional Power

Absolute authority or control without any restrictions or conditions.

Dispose

The act of selling, transferring, or getting rid of an asset or property.

Property

Assets or rights owned by individuals or entities, which can be tangible or intangible, and are subject to ownership claims.