I need this in the form of a decision tree 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 act before midnight tonight...

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Play now? Play later? You can become a millionaire! Thats what the junk mail said. But then there was the fine print If you

I need this in the form of a decision tree

I need this in the form of a decision tree 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 act before midnight tonight...

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 act before midnight tonight, then here are you chances: 0.15% that you receive $1,000,000; 50% that you get nothing, otherwise you must PAY $5000. 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 do, then we 20X your probability of winning big-yes, you will hava a 3% chance of receiving $150,000 and 50% chance of winning $5000, but must pay $10,000 otherwise. What is your expected outcome for attempting this venture? Solve this problem using a decision tree and clearly show all calculations and the expected value at each node. Answer these questions: 1) should you play at all? (596) And if so, what is my expected (net) monitary value? (10%) 2) If you play and don't win at all on the first try (but don't lose money), should you try again? (5%) why? (5%) 3) clearly show the decision tree (40%) and expected net monitary value at each node (25%)

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Answer 1

Answer #1

Decision Tree Pl Nouw 1.1/ 101.2 get thingノ50% chance 1.0 1小3 pay USD 5σ00 , 49.85% chance 다/ or, 43.85. chanel Receive USD 1

1	B	C
2	Node Code	Expected Monetary Value at Each Node
3	1.1.1	1500
4	1.1.2	0
5	1.1.3	2492.5
6	1.1.4.1	4500
7	1.1.4.2	2500
8	1.1.4.3	4700
9	1.1.4	22931
10	1.1 Option 1	-992.5
11	1.1 Option 2	24431

1	B	C
2	Node Code	Value
3	1.1.1	=(0.15*1000000)/100
4	1.1.2	=0.5*0
5	1.1.3	=(49.85*5000)/100
6	1.1.4.1	=0.03*150000
7	1.1.4.2	=0.5*5000
8	1.1.4.3	=0.47*10000
9	1.1.4	=(0.498520)(C6+C7-C8)
10	1.1 Option 1	=(C3+C4-C5)
11	1.1 Option 2	=C3+C4+C9

1) we should play Further, as Expected Monetary Value at the Node 1.1 Option 2 is USD 24431

2) if we should play again, even, if we don't win on the first try, we should try again, as Expected Monetary Value at the Node 1.1 Option 2 is USD 24431

3)Decision tree and Expected Monetary Value at the each node is shown above,

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Answer 2

I need this in the form of a decision tree 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 act before midnight tonight...

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I need this in the form of a decision tree 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 act before midnight tonight...

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Add Answer to: I need this in the form of a decision tree 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 act before midnight tonight...

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I need this in the form of a decision tree 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 act before midnight tonight...