Use the Information Below to Answer the Following Question(s)

question 47

Multiple Choice

Use the information below to answer the following question(s) . Below is a decision tree illustrating the R&D process for a new drug. Let us assume that if market is large, payoff is lognormally distributed with a mean of $4,900 million and a standard deviation of $1,000 million; if market is medium, payoff is lognormally distributed with a mean of $2,500 million and a standard deviation of $500 million; and if market is small, payoff is normally distributed with a mean of $1,800 million and standard deviation of
$200 million. Let us also assume that the cost of clinical trials is uncertain and estimates are modeled with a triangular distribution with a minimum of -$700 million, a most likely value of - $550 million, and a maximum of -$500 million. Use 10,000 trials and a random seed of 1.
-What is the coefficient of variation obtained from the simulation results? [Hint: Choose the approximate value.]

• A) 1.587
• B) 1.122
• C) 2.015
• D) 1.890

---

Definitions:

Nuclei

Structures within cells that contain the genetic material and act as control centers for cell growth, metabolism, and reproduction.

Troponin-Tropomyosin Complexes

Proteins associated with the regulation of muscle contraction, acting as a switch that allows muscle fibers to contract when calcium ions are present.

Skeletal Muscle Fibers

Individual cells within skeletal muscles, characterized by their long, cylindrical shape and presence of multiple nuclei, responsible for voluntary movements.

Myosin Binding Sites

Locations on actin filaments where myosin heads attach during muscle contraction.