Consider a hypothetical drug-development program requiring $200 million in out-of-pocket costs over a 10-year period during which no revenues are generated, and with only a 5% probability of success. However, if the drug development is successful, itis plausible to assume that it could generate a net income of $2 billion per year overa 10-year period of exclusivity from years 11–20. The present value of this incomestream in year 10 is $12.3 billion (using a 10% cost of capital).(a) Compute the expected return and standard deviation (over a 10-year period) ofthis investment. (b) Suppose we setup a megafund to fund 150 drug-development programs, with thesame amounts of investment and payoff as the one in part (a). Assuming that the successor failure of each program is independent of each other, what is the probability forthe megafund to score three or more successes in the 150 drug-development programs. (c) Compute the expected return and standard deviation (over a 10-year period) of the megafund.