Under which of the following conditions will objective risk decrease, assuming everything else remains constant?
A) the number of exposure units increases
B) the chance of loss decreases
C) the number of exposure units decreases
D) the probable variation of actual from objective losses increases.

Question

Quizplus · Accepted Answer

Objective risk decreases as the number of exposure units increases because the law of large numbers allows for more accurate predictions and reduces the relative variation of actual losses from expected losses.

Under Which of the Following Conditions Will Objective Risk Decrease