Use the Information for the Question(s)below

question 45

Multiple Choice

Use the information for the question(s) below.
Big Cure and Little Cure are both pharmaceutical companies.Big Cure presently has a potential "blockbuster" drug before the Food and Drug Administration (FDA) waiting for approval.If approved,Big Cure's blockbuster drug will produce $1 billion in net income for Big Cure.Little Cure has 10 separate less important drugs before the FDA waiting for approval.If approved,each of Little Cure's drugs would produce $100 million in net income for Little Cure.The probability of the FDA approving a drug is 50%.
-Consider a portfolio that consists of an equal investment in 20 firms.For each of these firms,there is a 70% probability that the firms will have a 16% return and a 30% that they will have a -8% return.Each of these firms' returns is independent of all others.The standard deviation of this portfolio is closest to:

• A)2.5%
• B)4.2%
• C)8.8%
• D)11.0%

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Definitions:

Alcohol-Related Causes

Pertains to health conditions, injuries, or diseases that are directly or indirectly caused by the consumption of alcohol.

Recent Immigrant

An individual who has moved to a new country to reside there permanently, often in search of better living conditions, within the last few years.

Factory

An industrial site, usually consisting of buildings and machinery, where workers manufacture goods or operate machines processing one product into another.

Poor Health

A state characterized by ill health, physical or mental, and often associated with a lack of resources, inadequate healthcare access, or unhealthy living conditions.