Question: 2 . Consider a stop loss cover that is issued to a cedant by a reinsurer with the following features. Priority limit is 8 0

2. Consider a stop loss cover that is issued to a cedant by a reinsurer with the following features. Priority limit is 80% of the Premiums (net of taxes). The reinsurance capacity is 20% of Premiums (net of taxes), with a copay by the cedant of 25% above the priority. What is the payout by the cedant and the reinsurer in the following cases?
a. If the loss is 70% of the premiums, how much will the cedant and reinsurer pay?
b. If the loss is 100% of the premiums, how much will the cedant and reinsurer pay?
c. If the loss is 115% of the premiums, how much will the cedant and reinsurer pay?

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