Decision trees. Draw the decision trees that correspond to the following descriptions. What

is the EMV of each of the trees?

(a) I can choose 'a', 'b' or 'c'. If I choose 'b' then I get $200. If I choose 'c' then one of

three things could happen: I could get $160 with probability 0.3; $400 with probability

0.1; or $80 with probability 0.6. If I choose 'a' then I enter a lottery where two possible

outcomes could occur: with probability 0.6 I would collect $150; and with probability 0.4 I

can choose either 'd' with a return of $240 or 'e' which results in $1000 with a probability

of 0.2 or $100 with a probability of 0.8.

(b) I can choose either 'A' or 'B'. If I choose 'A', I get either $50 with probability 0.3 or, with

probability 0.7, I get a choice between 'C' and 'D' (i.e. a decision node). If I choose 'C' I

then get an equal chance of getting $20 or $80. If I choose 'D' I get $60 with probability

0.6 or $40 with probability 0.4.

If I choose 'B' I get $60 with probability 0.8 or else a choice between 'E' and 'F'. If I choose

'E' I get $70 with probability 0.6 or $50 with probability 0.4. If I choose 'F' I get $500

with probability 0.1 or $10 with probability 0.9.