Question: Draw a decision tree, in which you are deciding to invest in the market. You have $100,000 to invest in bonds & stocks. You can

Draw a decision tree, in which you are deciding to invest in the market. You have $100,000 to invest in bonds & stocks. You can buy all bonds which grow by 1% in one year. Or, you can by lottery tickets. The lottery tickets could make your many 1000 times bigger with a chance of 0.001%, and you might lose all your money with a chance of 99.999%.

  • Which route is the logical route?
  • Would you change your mind if the percentage of winning or losing in lottery game changes?

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