Original Source: Investopedia

“What Is a Decision Tree?

A decision tree is a diagram or chart that people use to determine a course of action or show a statistical probability. It forms the outline of the namesake woody plant, usually upright but sometimes lying on its side. Each branch of the decision tree represents a possible decision, outcome, or reaction. The farthest branches on the tree represent the end results.  Individuals use decision trees to clarify and find an answer to a complex problem. Decision trees are frequently employed in determining a course of action in finance, investing or business.

The Basics of a Decision Tree

A decision tree is a graphical depiction of a decision and every potential outcome or result of making that decision. Individuals deploy decision trees in a variety of situations, from something simple and personal (“Should I go out for dinner?”) to more complex industrial, scientific or microeconomic undertakings. By displaying a sequence of steps, decision trees give people an effective and easy way to visualize and understand the potential options of a decision and its range of possible outcomes. The decision tree also helps people identify every potential option and weigh each course of action against the risks and rewards each option can yield…”

https://www.investopedia.com/terms/d/decision-tree.asp#ixzz3gT23ksHq

Contributors: Investopedia
Categories: Industry Articles, SIG U Resource
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