Which of the Following Statements About the Risk Pooling Is

Multiple Choice

Which of the following statements about the risk pooling is correct?

A) Risk pooling works best if the parties involved have heterogeneous risk characteristics.
B) Risk pooling works best if the number of parties involved is small.
C) Risk pooling works best if the loss experience of the parties involved is statistically dependent.
D) Risk pooling, assuming some assumptions are met, reduce overall risk.