Which of the following statements about the confidence interval is not correct? A) A confidence interval is based on the outcomes of the probability distribution. B) A confidence interval is calculated by adding and subtracting the standard deviation to/from the estimate of mean expected loss. C) A confidence interval tells the insurer something about the size of the risk pool. D) A confidence interval tells the insurer something about how much money it needs to cover potential losses.

Question

Quizplus · Accepted Answer

A confidence interval does not provide information about the size of the risk pool. It only gives a range of values within which the true value of the unknown parameter (such as the expected loss) is likely to lie with a certain level of confidence.

Which of the Following Statements About the Confidence Interval Is