dolution

Reframe your answer to Exercise 3.6 in terms of objectives and alternatives. That is, what are appropriate fundamental objectives to consider in the context of choosing how to present the investment information? How do decision trees and influence diagrams compare in terms of these objectives?

Exercise 3.6:

You have met an acquaintance for lunch, and he is worried about an upcoming meeting with his boss and some executives from his firm’s headquarters. He has to outline the costs and benefits of some alternative investment strategies. He knows about both decision trees and influence diagrams but cannot decide which presentation to use. In your own words, explain to him the advantages and disadvantages of each.