Question: [Contingencies) Consider two firms that self-insure for workers; compensation losses. Assume that the annual probability of a claim is I an 1.000 for each firm and that each claim has an expected value of S 10,000.
a. Him A has 3 employees
b. Firm B has 10.000 employees. Discuss how each firm should account for its liability for workers; compensation benefits. If there is any difference in your answers, explain why.