Which of the following statements concerning social insurance benefits is (are) correct?
I. Social insurance benefits are heavily weighted in favor of upper-income groups because of their higher earnings.
II. Social insurance benefits are financed entirely or in part by mandatory contributions by covered employers and employees, and not by general revenues of the government.
A) I only
B) II only
C) both I and II
D) neither I nor II
Question 2
JKL Insurance Company estimates that 14 out of every 100 homeowners it insures will file a claim each year. Last year, JKL insured 200 homeowners.
According to the law of large numbers, what should happen if JKL insures 2,000 homeowners this year?
A) The total number of claims filed by JKL policyowners should decrease.
B) The total dollar value of claims will decrease.
C) The average size of loss will decline in value.
D) The actual results will more closely approach the expected results.
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