Use the Information for the Question(s)below

question 43

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%.
-The standard deviation of Little Cure's average net income for their ten new drugs is closest to:

• A)$50 million.
• B)$25 million.
• C)$16 million.
• D)$500 million.

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Definitions:

Social Security

A government program that provides financial support to people who are retired, disabled, or survivors of deceased workers.

Medicare

A federal health insurance program in the United States for people aged 65 and over, or for those under 65 with certain disabilities or conditions.

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The charge imposed by the IRS on the yearly income of individuals, corporations, trusts, and various legal bodies.

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A promissory note sold for less than its face value that will be worth its full value upon maturity.