Tree diagrams, also known as probability trees or decision trees, are quite versatile and may be useful in many fields, including finance.

Probability Trees: Theory The basic idea of a probability tree is to use the properties of probability to make a branching diagram of different outcomes.

Tree diagrams are a visual way of showing all possible outcomes of two or more events. Each branch is a possible outcome and is labelled with a probability. Two events are independent if the ...

Example 3.3: Contract Bidding Problem This example illustrates the use of several of the graphics options for producing graphics quality decision tree diagrams. The production manager of a ...