In decision trees, EMVs are calculated through a ____ process.
A) "pay it forward"
B) "going forward"
C) "folding back"
D) time value

Question

Quizplus · Accepted Answer

EMVs (Expected Monetary Values) are calculated through a process called "folding back" or "backward induction." In this process, the probabilities from the root node to the end nodes are multiplied by their respective payoffs and summed up to get the expected monetary value for each decision alternative at the root node. This process is called "folding back" because it involves folding the probabilities and payoffs back from the end nodes to the root node.

In Decision Trees, EMVs Are Calculated Through a ____ Process