Which of the following statements about the risk reduction is correct?
A) When the probability distribution is non-normal, risk cannot be reduced by increasing the pool size.
B) After the pool size has reached 36, risk can no longer be reduced any further.
C) Risk is reduced as the pool size increases.
D) All of the above are correct.

Question

Quizplus · Accepted Answer

As the pool size increases, the risk is spread out among more individuals, leading to a reduction in overall risk. Choice A is incorrect because increasing the pool size can still reduce risk even if the probability distribution is non-normal. Choice B is incorrect because there is no specific number at which risk reduction stops.

Which of the Following Statements About the Risk Reduction Is