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

question 25

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 the market is large, the payoff is lognormally distributed with a mean of $ 4,900 million and a standard deviation of $ 1,000 million; if the market is medium, the payoff is lognormally distributed with a mean of $2,500 million and a standard deviation of $500 million; and if the market is small, the payoff is normally distributed with a mean of $1,800 million and standard deviation of $200 million.

-What is the coefficient of variation obtained from the simulation results? [Hint: Choose the approximate value.]

• A)1.587
• B)1.126
• C)2.015
• D)1.890

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Definitions:

Managerial Positions

Roles within an organization that involve overseeing the work of others, making decisions, and executing plans to achieve business objectives.

Derail

To cause a process or progress to fail or abruptly deviate from its intended course, often leading to a failure or setback.

Interpersonal Skill

The ability to communicate or interact well with other people, often demonstrating empathy, negotiation, and conflict-resolution abilities.

Formal Education

Structured learning that takes place within an academic institution, leading to certification or a degree.