Chance nodes are
A)nodes provided at the end of the states-of-nature branches.
B)nodes indicating points where an uncertain event will occur.
C)nodes provided at the end of the decision alternative branches where a payoff is shown.
D)nodes indicating points where a decision is made.

Question

Quizplus · Accepted Answer

Chance nodes represent uncertain events where the outcomes are not known with certainty. Therefore, option B accurately describes chance nodes. Option A describes the endpoint of branches representing the possible outcomes of states-of-nature, which are called terminal nodes. Option C describes terminal nodes where payoffs are shown. Option D describes decision nodes where a decision must be made.

Chance Nodes Are