An investment bank is thinking of investing in a start-up alternative energy company. They can become a

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An investment bank is thinking of investing in a start-up alternative energy company. They can become a major investor for $6M, a moderate investor for $3M, or a small investor for $1.5M. The worth of their investment in 12 months will depend on how the price of oil behaves between then and now. A financial analyst produces the following payoff table with the net worth of their investment (predicted worth - initial investment) as the payoff.
An investment bank is thinking of investing in a start-up

Construct a decision tree for this payoff table.

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Business Statistics

ISBN: 9780321925831

3rd Edition

Authors: Norean Sharpe, Richard Veaux, Paul Velleman

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