The law of large numbers:
A. can be used to explain why some people are risk averse and others are risk neutral or risk loving.
B. can be used to explain why some people choose to self-insure against random, single and largely unpredictable events.
C. states that large amounts of information are often preferred to small amounts of information.
D. states that the average outcome of a large number of similar events can often be predicted.
Answer:D
The law of large numbers:
A. can be used to explain why some people are risk averse and others are risk neutral or risk loving. B. can be used to explain why some people choose to self-insure against random, single and largely unpredictable events. C. states that large amounts of information are often preferred to small amounts of information. D. states that the average outcome of a large number of similar events can often be predicted.