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Decision Tree AssignmentPlay now? Play later?You can become a millionaire! That's what the junk mail said. But then there was the fine print:If you send in your entry before midnight tonight, thenDeci
Decision Tree AssignmentPlay now? Play later?You can become a millionaire! That's what the junk mail said. But then there was the fine print:If you send in your entry before midnight tonight, then
Decision Tree Assignment
Play now? Play later?
You can become a millionaire! That's what the junk mail said. But then there was the fine print:
If you send in your entry before midnight tonight, then here are your chances:
0.1% that you win $1,000,000
75% that you win nothing
Otherwise, you must PAY $1,000
But wait, there's more! If you don't win the million AND you don't have to pay on your first attempt,
then you can choose to play one more time. If you choose to play again, then here are your chances:
2% that you win $100,000
20% that you win $500
Otherwise, you must PAY $2,000
What is your expected outcome for attempting this venture? Solve this problem using
a decision tree and clearly show all calculations and the expected monetary value at each node.
Use maximization of expected value as your decision criterion.
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******** **** ************** **** **** later?You *** become * millionaire! ****** **** *** **** mail **** *** then there was *** fine print:If *** **** ** **** ***** ****** ******** ******* ************ **** ************** now? Play ********* *** become * ************ That's **** *** **** **** **** But **** ***** *** the **** ******** you **** in your ***** ****** ******** ******* then **** are **** chances:01% that *** *** *********** that *** *** nothingOtherwise you must *** $1000But wait there's ***** ** *** don't win *** million *** *** ***** **** ** *** ** **** ***** attemptthen *** *** ****** ** **** *** **** **** ** *** choose ** **** ***** **** **** *** your chances:2% **** *** win $10000020% **** *** *** ************* *** **** *** ********* is **** expected ******* *** ********** **** ******** Solve **** ******* ****** decision **** and clearly show *** calculations *** *** ******** ******** ***** ** **** nodeUse ************ ** ******** ***** ** your ******** *************** ***** ************ Should *** **** at **** **** ** *** play what ** **** ******** (net) ******** value? ******* ** you **** *** don't *** ** all ** *** ***** *** **** ***** **** ****** should *** *** again? (5%) Why? ******* ******* **** *** ******** tree ***** and ******** net monetary value ** each **** *****
