Decision Tree for Assets
Use immediately

Decision Tree for Assets

Company Name /Date

Decision Tree

49.5

49.5

42.5

Accept

Reject

$50

0.25

$80

0.25

$1.00

0.25

$70

0.25

$50

0.25

$80

0.25

$1.00

0.25

$70

0.25

0

90

18

90

40

69

22

39

Boat

Freighter

Freighter

Freighter

Freighter

Boat

Boat

Boat

24

40

60

55

22

12

39

25

29
1
1
publish time: 2021-05-17
WSeBuxWq

The end-of-season assets are: 30 + [($.50) (300) - 180] = $0 thousand. (The low-price results in a $30 thousand dollar loss reducing his assets to zero.) If he accepts the contract, use the freighter, and both catches are large, his assets are 30 + [165 - 66 + 75 - 180] = $24 thousand, and so on. Assuming t-v1organ is risk-neutral, what is his best course of action?

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