The collateral in a special-purpose reinsurer (SPR) of a Cat bond is used to cover the principal and interest at maturity. A catastrophic event may, however, trigger a payment to the ceding company. 2.a. Explain why designing a trigger is necessary for Cat bonds. (2 marks) 2.b. Discuss the types of triggers. (8 marks) 2.c. Discuss the trade-off between the types of triggers. (5 marks)