Decision Trees Quiz by Shubhrata Shrestha | Sep 23, 2025 | 0 comments Decision Trees Quiz 1. In a decision tree, what does a square represent? a) Outcome b) Probability node c) Decision node d) Rejected option None 2. Which of the following is a key feature of probability nodes? a) Represent choices b) Probabilities must sum to 1 c) Show costs only d) Indicate rejected branches None 3. What is the formula for calculating expected value in a decision tree? a) Cost – Revenue b) Probability × Expected Revenue c) Revenue ÷ Cost d) Net Expected Value ÷ Probability None 4. One advantage of decision trees is: a) They eliminate business risks b) They present decisions clearly and logically c) They include qualitative insights d) They are free from estimation errors None 5. Which of the following is a disadvantage of decision trees? a) They speed up decision-making b) They rely on estimated probabilities c) They clarify risks and rewards d) They encourage objective analysis None 6. The final step in constructing a decision tree is to: a) Assign costs b) Map options c) Reject weaker options d) Assign probabilities None 7. Net Expected Value (NEV) is calculated as: a) Total expected value – Cost of option b) Expected revenue × Probability c) Revenue ÷ Cost d) Probability + Expected revenue None 8. Which component of a decision tree represents uncertain outcomes? a) Branches b) Decision nodes c) Probability nodes d) Net values None 9. Why must probabilities in a decision tree add up to 1? a) To avoid bias b) Because one of the outcomes will occur c) To calculate costs correctly d) To show rejected options None 10. Which of the following is NOT a strength of decision trees? a) Speed up decision-making b) Objectivity c) Use of probabilities d) Always provide accurate forecasts None Time's up Submit a Comment Cancel replyYour email address will not be published. Required fields are marked *Comment * Name * Email * Website Save my name, email, and website in this browser for the next time I comment. Δ
