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Use the In uence Diagram created in the prior example to create a Decision Tree. (Investment options
20 questions left - Renews Dec. 2, 2022
are repeated for your convenience.) Test the Decision Tree by changing the probability of market up,
at, and down as follows:
Enter question

P(Market Up)=0.491, P(Market Flat) = 0.291, and P(Market Down) = 1-P(Market Up)-P(Market Flat).

What is the Expected Monetary Value (EMV) of the decision? State your answers in terms of dollars
and cents. (ie. Dollars, accurate to two decimal points.)
Continue to post
a high-risk stock

- $200 brokerage fee

Payoff-

$1700 if the market goes up

$300 if market stays neutral

-$800 if the market goes down

a low-risk stock

- $200 brokerage fee

Payoff-
My Textbook Solutions
$1200 if the market goes up

$400 if market stays neutral Supply Chain Manage…

 
$100 if the market goes down
Solutions ➔
a savings account that pays a sure $500

Supply Chain Manage…

 
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