In a Decision Tree, the Difference Between a Decision Node

question 153

Multiple Choice

In a decision tree, the difference between a decision node and a terminal node is that

• A)at a decision node all participants are free to make individual decisions but at a terminal node they must agree on a collective decision.
• B)at a decision node all participants make the same decision, while at a terminal node different players may make different decisions.
• C)at a decision node a decision must be made, while a terminal node shows the payoff.
• D)at a decision node a decision must be made, while at a terminal node the final decision must be made.

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Definitions:

Convertible Bonds

Debt securities issued by a corporation that can be converted into a specified number of shares of the corporation's stock at the option of the bondholder, typically at certain times during the bond's life.

Equity Method

An accounting technique used to record an investor's proportional share of the investee company's income, expenses, and dividends received.

Investment Balance

The total value of all securities, such as stocks, bonds, and other investments, an individual or entity owns.

Cash Dividends

Earnings paid out to shareholders by a corporation, typically as a profit distribution.