1. Suppose instead that Silly Insurance and Big Dog Re enter into a surplus share treaty, with Silly having a retention limit of $250,000 (1 line). Assume that a total of 4 lines are ceded to Big Dog. If Silly Insurance issues a policy on a property for $1,000,000 which then suffers a $200,000 loss, how much does each company pay?
   1. Silly = $100,000; Big Dog = $100,000
   2. Silly = $40,000; Big Dog = $160,000
   3. Silly = $160,000; Big Dog = $40,000
   4. Silly = $150,000; Big Dog = $50,000
   5. Silly = $50,000; Big Dog = $150,000
   6. Silly = $200,000; Big Dog = $0
2. Given the structure of the reinsurance arrange between Silly Insurance and Big Dog Re last slide, what is the largest policy Silly Insurance can issue without exhausting its reinsurance?
   1. $1,500,000
   2. $1,250,000
   3. $1,000,000
   4. $750,000
   5. $500,000
   6. $250,000
   7. $200,000