a. Question 1 (20 Marks) Rooster Hut is a fast-food caf chain with more than 200 stores operating in the region of Hong Kong and Mainland China. Name three major pure risks' exposure that Rooster Hut might encounter. 2 marks b. Identify and describe two types of insurance policy that would provide cover to protect Rooster Hut's properties and/or liabilities. 5 marks c. Suppose that the number of property damage losses for Rooster Hut's stores is normally distributed with a mean (m) of 450 and a standard deviation (s) of 60. i. What is the probability that the number of property damage losses will be between 354 and 546? Show all your calculations. ii. What is the probability that the number of property damage losses will be between 525 and 606? Show all your calculations. iii. What number of property damage losses does the highest 14 percent of x values fall? Show all your calculations. 9 marks d. Rooster Hut is considering implementing a risk control system, which will cost about $15,000,000 at installation and generate the following estimated net after-tax cash flows: Year 0 1 2 Cash Flow -$15,000,000 $4,500,000 $4,500,000 $4,900,000 $5,500,000 3 4 Assuming that the market interest rate is 7%, calculate the net present value (NPV) of this risk control system. Does the NPV indicate that this system is acceptable to Rooster Hut? Apart from the estimated net after-tax cash flows, what are the other relevant factors that Rooster Hut should consider? Explain your answers and show all your calculations. 4 marks