Use the Information Below to Answer the Following Questions)

question 6

Multiple Choice

Use the information below to answer the following questions) . 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 value of mean obtained from the simulation results? [Hint: Choose the approximate value.]

• A) $ 119.0
• B) $ 116.1
• C) $ 106.2
• D) $ 94.4

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Definitions:

Minimal Group Paradigm

A concept in social psychology that illustrates how individuals can form in-groups and out-groups with minimal conditions, such as random assignment to groups.

Intergroup Conflict

Conflict that arises between different groups or teams, often due to competition for resources or conflicting goals.

Tajfel

Refers to Henri Tajfel, a social psychologist best known for his work on the social identity theory, which explores how group membership affects self-identity and intergroup behavior.

Turner

Could refer to various contexts, like Joseph Turner, the British landscape painter, but without additional context, a precise definition isn't possible here.