Analyze the Following Decision Tree

question 47

Multiple Choice

Analyze the following decision tree.After determining the missing probabilities,identify which alternative (Option 1 or Option 2) has the higher expected payoff.What is the expected payoff?

• A)Option 1,with an expected payoff of less than $35
• B)Option 1,with an expected payoff of no less than $35
• C)Option 2,with an expected payoff of less than $35
• D)Option 2,with an expected payoff of more than $35

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Definitions:

Registration

A legislated requirement for incorporating a company in some jurisdictions in Canada.

Personal Property Security Act

A body of law that governs the rights of creditors and debtors with respect to personal property used as security.

Secured Transaction

A collateral right to debt giving the creditor the right to take back the goods or intercept the debt owing used as security in the event of default.

Division I Proposal

An alternative to bankruptcy, created by the Bankruptcy and Insolvency Act, whereby the debtor secures some time to reorganize his affairs and make a proposal for partial payment that will satisfy his creditors; if the creditors reject the proposal, the insolvent debtor is deemed to have made an assignment in bankruptcy from the day of the meeting of the creditors, and the normal bankruptcy procedures follow.