Use the Information for the Question(s)below

question 19

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%.
-What is the standard deviation of Big Cure's average net income for their new blockbuster drug?

• A)$0
• B)$1 billion
• C)$100 million
• D)$500 million

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Definitions:

Borrowing Costs

Borrowing Costs are the interest and other costs that an entity incurs in connection with the borrowing of funds.

U.S. GAAP

Generally Accepted Accounting Principles in the United States, a standard framework of guidelines for financial accounting.

IFRS

A collection of worldwide accounting standards created by the International Accounting Standards Board, known as International Financial Reporting Standards.

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The U.S. Securities and Exchange Commission, a federal agency responsible for enforcing federal securities laws and regulating the securities industry, stock and options exchanges.