Suppose that Jungho and Jungyae enter into a pooling arrangement. Assume that both have the followi ng loss distribution and that losses are independent. Loss Probability 50,000 0.01 20,000 0.02 10,000 0.07 0.9 0 If SGI could pool an unlimited number of independent and homogeneous exposure units, why can SGI predict future average loss accurately and what pure premium would SGI charge to cover their underlying losses?