Need to understand how to do the below decision tree in Excel: You have the oppo

Question

Need to understand how to do the below decision tree in Excel:

You have the opportunity to bet on a boxing match: you could choose to bet or not bet. If you place a bet and your fighter wins, you'll earn $100. If you bet and your figher loses, you'll lose $110. You believe your figher has a 90% chance of winning the fight. One week before the fight you can purchase the Insider's Guide, which gives predictions on who will win upcoming fights. The Guide costs $20. If the guide predicts your figher will win, the probability of that outcome increases to 95%, but if it predicts a loss, the probability falls to 60%. The probability that the guide will predict a win for your fighter is 70%. Develop a decision tree to determine if you should purchase the guide and/or bet on the fight. Be sure that the decision tree (graphical) is complete (including all branches, payoffs, probabilities, and labels), as well as all calculations (please number your EMV calculations). You can draw the tree by hand and cut-paste a scan/photo of the tree into this sheet if needed. I recommend drawing the tree using the shapes below and the Excel drawing tools.

Explanation / Answer

You have to install tree plan add-in excel.

1. Open excel and go into the help menu
2. Search ‘tree diagram’
3. Click on ‘TreePlan’, select ‘Decision Tree Add-in For Excel’

Here’s a List Of The Top 3 Free Decision Tree Add-in for Excel:

SolutionTree at : www.stricklensolutions.com
TreePlan at : www.treeplan.com
PrecisionTree at : www.palisade.com

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