Suppose that you were thinking of making an investment in two stocksthe ABC Aerospace Corporation and the XYZ Electronics Corporationbased on the advice on your stockbroker. From your readings of various stock market analysts' reports, you understand that there is a 50-50 expectation that the stock price of ABC will go up (in other words, the probability of the stock increasing in price is 50%).

You also have learned that the stock price of the XYZ Corporation is correlated with the movement of ABC's stock price since ABC is a major customer of XYZ. If the stock of ABC goes up, there is a 40% probability that the stock of XYZ will go up. However, if the stock of ABC goes down, the probability that the stock of XYZ goes up is only 20%.

Identify key uncertainties:

Identify the key decisions:

Draw an Influence Diagram below: