Which of the Following Statements About the Average Loss Severity

Multiple Choice

Which of the following statements about the average loss severity and average loss frequency is not correct?

A) The average loss severity represents the average size of losses that might occur.
B) The average loss frequency represents the average number of losses that might occur.
C) Both the average loss severity and the average loss frequency are outside the control of the risk manager.
D) The average loss can be estimated by multiplying the average loss severity with the average loss frequency.