Use the Information for the Question(s)below

question 89

Essay

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 diversification achieved by an investor if he invests in Wesfarmers, National Australia Bank and BHP Billiton?
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Definitions:

Erodes Material

The process by which earth, rock, or other materials are worn away by natural forces such as water flow, wind, or ice.

Abrasion

The wearing away of rock or other material surfaces through contact with particles such as sand or pebbles being moved by wind, water, or ice.

Turbulence

A state of fluid flow characterized by chaotic, irregular motion, often encountered in the atmosphere or in flowing water.

Discharge Pattern

The variation in the volume of water that flows in a stream or river over time.