Decision Trees

What’s it all about?

A technique using a visual representation of options and probabilities to allow you to make the best choice.

Download the PDF file .

Download the PDF file .

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Wikipedia entry on Decision Trees.

https://en.wikipedia.org/wiki/Decision_treehttps

 

Possible Written Questions.

(No indication of marks – the more marks a question gets, the more you are expected to write – detail that is, not just words!) If you can’t answer these, you need to do some more reading. I do ‘find’ questions elsewhere, so these aren’t all questions I have used myself.

Mostly questions will be calculations, but the calculation normally ends up with you recommending a specific option. Typically this will be the option with the highest EV (Expected Value). Watch out though. Sometimes the option with the highest EV will have a high percentage chance of failure. You should take this into account. The EVs are simplistically what you would expect to earn on average if you did it 100 times. The reality is that usually you will only do it once!