this is the first part of my question which I managed to solve but you are gonna need it to solve the second part which I NEED HELP in.Model the following investment decision as an Influence Diagram:a high-risk stock- $200 brokerage feePayoff-$1700 if the market goes up$300 if market stays neutral-$800 if the market goes downa low-risk stock- $200 brokerage feePayoff-$1200 if the market goes up$400 if market stays neutral$100 if the market goes downStudent1 hour agoa savings account that pays a sure $500P(Market Up)=0.480, P(Market Flat) = 0.297, and P(Market Down) = 1-P(Market Up)-P(Market Flat).Student1 hour ago Using the same Influence Diagram, connect the uncertainty tothe decision block with a SEQUENCE arrow indicating that thedecision maker has the information prior to making thedecision. (Investment options are repeated below for yourconvenience.) Create a Decision Tree from the modifiedInfluence Diagram, and test the Decision Tree by changing theprobability of market up, flat, and down as follows:P(Market Up)=0.501, P(Market Flat) = 0.294, and P(MarketDown) = 1-P(Market Up)-P(Market Flat).Make sure you modify ALL probabilities of market up, flat anddown for each branch. What is the Expected Monetary Value(EMV) of the decision? State your answers in terms of dollarsand cents. (ie. Dollars, accurate to two decimal points.)a high-risk stock- $200 brokerage feePayoff-$1700 if the market goes up$300 if market stays neutral-$800 if the market goes downa low-risk stock- $200 brokerage feePayoff-$1200 if the market goes up

EMV analysis (expected monetary value) is a statistical concept that determines the average outcome…

Answered: this is the first part of my question…

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter15: Decision Analysis

Section: Chapter Questions

Problem 6P

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this is the first part of my question which I managed to solve but you are gonna need it to solve the second part which I NEED HELP in. Model the following investment decision as an Influence Diagram: a high-risk stock - $200 brokerage fee Payoff- $1700 if the market goes up $300 if market stays neutral -$800 if the market goes down a low-risk stock - $200 brokerage fee Payoff- $1200 if the market goes up $400 if market stays neutral $100 if the market goes down Student 1 hour ago a savings account that pays a sure $500 P(Market Up)=0.480, P(Market Flat) = 0.297, and P(Market Down) = 1-P(Market Up)-P(Market Flat). Student 1 hour ago

Using the same Influence Diagram, connect the uncertainty to
the decision block with a SEQUENCE arrow indicating that the
decision maker has the information prior to making the
decision. (Investment options are repeated below for your
convenience.) Create a Decision Tree from the modified
Influence Diagram, and test the Decision Tree by changing the
probability of market up, flat, and down as follows:
P(Market Up)=0.501, P(Market Flat) = 0.294, and P(Market
Down) = 1-P(Market Up)-P(Market Flat).
Make sure you modify ALL probabilities of market up, flat and
down for each branch. What is the Expected Monetary Value
(EMV) of the decision? State your answers in terms of dollars
and cents. (ie. Dollars, accurate to two decimal points.)
a high-risk stock
- $200 brokerage fee
Payoff-
$1700 if the market goes up
$300 if market stays neutral
-$800 if the market goes down
a low-risk stock
- $200 brokerage fee
Payoff-
$1200 if the market goes up

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