When you're editing topics in Author, you can insert file objects using Insert File Object from Thumbnail.
Insert File Object from Thumbnail displays file objects in a folder as thumbnails, making it easier to find the correct image. You can navigate to any folder to view its file objects, or select from a list of folders which you've set up.
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Add folders to the Insert File Object from Thumbnail folder list:
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In Author click File > Thumbnail Folders.
The following window appears: -
Add or remove folders as required.