After all probabilities and payoffs are placed on a decision tree, the decision maker calculates expected values at decision nodes and makes selections at state of nature nodes.

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25-08-2022
Mathematics

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After all probabilities and payoffs are placed on a decision tree, the decision maker calculates expected values at decision nodes and makes selections at state of nature nodes.

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Tundexi Tundexi · Answer 1 · 2022-08-29T13:27:11+02:00

It is a true statement that the decision maker calculates expected values at decision nodes and makes selections at state of nature nodes when all probabilities and payoffs are placed on a decision tree.

What is a decision tree?

This is a pictorial diagram that shows the sequence of steps that was used to arrive at the solution of a problem.

This tree has branches which shows the different choices that are available in order to arrive at the solution of a problem. Therefore, the given statement is a true statement.

Full sentence "After all probabilities and payoffs are placed on a decision tree, the decision maker calculates expected values at decision nodes and makes selections at state of nature nodes. True/False"