Exhibit 14.5 The Following Questions Are Based on the Information Below

question 32

Multiple Choice

Exhibit 14.5
The following questions are based on the information below.
An investor is considering 4 investments, A, B, C, D. The payoff from each investment is a function of the economic climate over the next 2 years. The economy can expand or decline. The following decision tree has been developed for the problem. The investor has estimated the probability of a declining economy at 40% and an expanding economy at 60%.
-A square node in a decision tree is called a(n) ____ node.

• A) chance
• B) random
• C) decision
• D) event

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Definitions:

Syntax

The set of rules, principles, and processes that govern the structure of sentences in a language, determining word order and arrangement.

Transformational Rule

In linguistics, a rule that takes an input, such as a basic sentence structure, and transforms it into a new structure, often to express a different grammatical mood or voice.

Cognition

The mental processes involved in gaining knowledge and comprehension, including aspects like thinking, knowing, remembering, judging, and problem-solving.

Mental Processes

These refer to the internal cognitive activities that include thinking, perceiving, problem-solving, and information processing.