6 pts 19 of 20 (14 complete) This Test: 100 pts pot Louisiana is busy designing

Question

6 pts 19 of 20 (14 complete) This Test: 100 pts pot Louisiana is busy designing new lotery soralch off games. In the latest game, Bayou Boondoggle, the player is instructed to sratch off one spot A, B, or C. A can reveal "Loser"Win $5, or Win $15. B can reveal "Loser or Take a Second Chance" C can reveal Loser or Win $350 On the second chanoe, the player is instructed to scratch off D or E. D can reveal Loser or "Win $5. E can reveal Loser or "Win $20* The probabilises at A are 0.70, 0.19, and 0.11. The probabliše B are 0.60 and 0.40. The probabilities at C are 0.995 and 0.005. The probabilities at D are 04 and O.& Finaly, the probabilities at E are 0.90 and 0.10. Draw the dedision tree that represents this scenaria. Use proper symbols and label all branches cleatly Caloulate the expected value of this game. Choose the correct decision tree below B. 16 5% Chance (0 40) Click to select your answers). provide a framework to quantify the values of outcomes and the probabilities of achieving them MacBook Air 5 8 9

Explanation / Answer

1) Ans C

Reason: A doesn't mentions probabilities, B mentions options under 'A' in 'C'. D is wrong as it has interchanged probability in D & E

2) Best Alternative:

A = 0.7*0 + 0.19*5 + 0.11*15 = 2.47

B = 0.6*0 + 0.4*Max(D,E)

               D = 0.4*0 + 0.6*5 = 3

               E = 0.9*0 + 0.1*20 = 2

B = 0.6*0 + 0.4*3 = 1.2

C = 0.995*0 + 0.005*350 = 1.75

Ans = A

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