Money, banking and financial marketsCar insurances companies eliminates risk (or come close) by selling a large number of policies . Explain how they do this.

Money, banking and financial markets
Consider an investment that pays off $800 or $1,400 per $1,000 invested with equal probability. Suppose you have $1,000 but are willing to borrow to increase your expected return. What would happend to the expected value and standard deviation of the investment if you borrowred and additional $1,000 and invested a total of $2,000? What if borrowed $2,000 to invest a total of $3,000?

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