Heading: Analyzing Risky Decisions

Multiple Choice

Heading: Analyzing Risky Decisions
**Reference: Use the decision tree along with the given probabilities to answer the next six questions
Probability Event A = 30% Probability Event B = 70%
Probability Event 1 = 58% Probability Event 2 = 42%
Probability of Event A given that Event 1 occurs = 16%
Probability of Event B given that Event 1 occurs = 84%
Probability of Event A given that Event 2 occurs = 50%
Probability of Event B given that Event 2 occurs = 50%

-*If the decision maker chooses Decision A and Event 1 occurs, which decision alternative should the decision maker choose at node D?

A) Decision 1
B) Decision 2
C) Either Decision; they both have the same expected value.
D) Neither Decision; more information is needed.