Use the Information for the Question(s)below

question 71

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 Therapeutic Goods Administration (TGA) 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 TGA 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 TGA approving a drug is 50%.
-What is the expected payoff for Little Cure's 10 drugs?

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

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Definitions:

Bile Secretion

The process by which the liver produces bile, a substance that helps digest fats.

Cystic Duct

A tube that transports bile from the gallbladder into the common bile duct and then into the small intestine.

Common Bile Duct

A duct that carries bile from the liver and gallbladder to the duodenum, important for digestion and absorption of fats.

Emulsifies Fats

The process of breaking down fats into smaller droplets, often by bile in the digestive system, to aid in fat digestion and absorption.