Exam DISC-RM Practice Question 465
Study guide: Exam DISC-RM
Insurer A pools 900 similar homes and Insurer B pools 3,600. Each home has an independent probability of 0.02 of a fire claim in a year. Measuring objective risk as the standard deviation of the number of claims divided by the expected number, how does Insurer B's objective risk compare with Insurer A's?
- A) It is one-quarter of Insurer A's
- B) It is one-half of Insurer A's
- C) It is the same as Insurer A's
- D) It is four times Insurer A's
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