1. Suppose that Silly Insurance Company enters into an Excess of Loss reinsurance agreement with Big Dog Re to cover single loss occurrences over the next year. Big Dog Re agrees to pay all losses exceeding $5 million dollars up to a maximum for the occurrence of $10 million. How much does each company pay in the event of a $6.5 million loss?
   1. Silly = $6.5 million, Big Dog = $0
   2. Silly = $0, Big Dog = $6.5 million
   3. Silly = $5 million, Big Dog = $1.5 million
   4. Silly = $1.5 million, Big Dog= $5 million
   5. Silly = $3.25 million, BigDog Re = $3.25mill
2. CONTINUED suppose instead that the loss from the occurrence is $11 million. How much does each company pay?
   1. Silly = $5 million, BigDog = $6 million
   2. Silly = $6 million, BigDog = $5 million
   3. Silly = $5.5 million, BigDog = $5.5 million
   4. Silly = $5 million, BigDog = $5 million
   5. Silly = $4 million, BigDog = $6 million
   6. Silly = $6 million, BigDog = $4 million