(A) Construct a Decision Tree to Help Her Model Her

question 98

Essay

(A) Construct a decision tree to help her model her option decision making. Make sure to label all decision and chance nodes and include appropriate costs, payoffs and probabilities.
(B) What is the optimal decision making policy regarding the options in all possible scenarios over the next two years?
(C) What is the expected value of the stock options? Ignore the time value of money (assume no discounting of future payoffs)
(D) If her estimates of the increases/decreases or probabilities are inaccurate, could the options have a negative EMV?

---

Definitions:

Eighth Week

A time frame referenced in developmental biology where significant changes occur in the embryo, marking the end of the embryonic stage of prenatal development.

Pregnancy

A condition in which a woman carries a developing fetus inside her uterus.

X-linked Traits

Genetic characteristics determined by genes located on the X chromosome.

Carriers

Individuals or organisms that possess and can transmit a gene or infectious agent to others without necessarily showing symptoms of disease themselves.