Final answer:
The standard deviation decreases and the expected value of the loss has no effect as more individuals join a risk pool, as risks are more spread out but the expected losses stay the same on average.
Step-by-step explanation:
When additional individuals are added to a risk pool, the standard deviation of the losses decreases while the expected value of the loss has no effect or remains the same. This is because as the risk pool becomes larger, the risks are spread out over more individuals, leading to a reduction in variability (standard deviation) of the losses. However, the expected value, which is the average loss per individual, doesn’t change as it is a long-term average and doesn't depend on the number of individuals in the pool.As additional individuals are added to a risk pool, the standard deviation increases while the expected value of the loss has no effect on. Therefore, the correct answer to this question is a) Increases; Increases.