Use the following decision tree to answer the next question.

-In the decision tree above, for what probability of Event 1 will Decision 1 and Decision 2 have the same expected value?
A)0.24
B)0.36
C)0.44
D)0.56

Question

Use the following decision tree to answer the next question.
 
-In the decision tree above, for what probability of Event 1 will Decision 1 and Decision 2 have the same expected value?
A)0.24 
B)0.36 
C)0.44 
D)0.56

Quizplus · Accepted Answer

The expected value of Decision 1 is 0.6 * 100 + 0.4 * 0. The expected value of Decision 2 is 0.6 * 50 + 0.4 * 100. For these two expected values to be equal, we must have 0.6 * 100 + 0.4 * 0 = 0.6 * 50 + 0.4 * 100. Solving for P(Event 1), we get P(Event 1) = 0.36.

Use the Following Decision Tree to Answer the Next Question