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Sometimes three point approximations are used to incorporate outcomes, which have a continuous probability distribution, into decision trees. It is inadvisable to use such approximations
Sometimes three point approximations are used to incorporate outcomes, which have a continuous probability distribution, into decision trees. It is inadvisable to use such approximations when:
- The continuous probability distribution is slightly asymmetric
- Some of the outcomes represented by the distribution are negative
- The continuous probability distribution has more than one peak
- Probability distributions applying to different parts of the tree are not independent
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