Decision trees and expected monetary value

Decision trees and expected monetary value Quiz

Spec 7.1–2 · Edexcel A-Level Further Maths: Quiz

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5 questions, one answer each

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  1. 1. At a decision node the decision maker:

    • A. Weights outcomes by probability
    • B. Chooses the most favourable branch
    • C. Records the cost of a survey
    • D. Adds all the pay-offs

  2. 2. A chance node has a 0.4 probability of £50 and a 0.6 probability of £10. What is its EMV?

    • A. £30
    • B. £60
    • C. £34
    • D. £26

  3. 3. In a decision tree, a decision node is usually drawn as a:

    • A. Square
    • B. Circle
    • C. Triangle
    • D. Diamond

  4. 4. A project costs £5000. It has a 0.5 chance of £30 000 revenue and a 0.5 chance of £0 revenue. What is the EMV of its profit?

    • A. £15 000
    • B. £25 000
    • C. £10 000
    • D. £12 500

  5. 5. A person prefers a certain £40 000 to a gamble with an EMV of £40 000. In utility terms this means:

    • A. The gamble has the larger EMV
    • B. The certain £40 000 has a higher utility than the gamble's expected utility
    • C. Both options have equal utility
    • D. The probabilities are ignored

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