Lesson 2.14.1

2.14.1 Decision trees Quiz: OCR Business, Unit 2

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 2.14.1, Decision trees: 20 multiple choice questions for the OCR Business (H431), Unit 2: Business objectives and strategy, written with Revision Ninja.

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The 20 questions

  1. What shape represents a decision point on a decision tree?

    • Square
    • Diamond
    • Triangle
    • Circle

  2. What shape represents an uncertain outcome or chance node on a decision tree?

    • Rectangle
    • Circle
    • Square
    • Hexagon

  3. How is the Expected Value of an outcome calculated on a decision tree?

    • Probability x Payoff
    • Probability + Payoff
    • Revenue - Cost
    • Payoff / Probability

  4. An outcome has a 0.6 probability of £100,000 profit and 0.4 probability of £20,000 loss. What is the EV?

    • £48,000
    • £52,000
    • £40,000
    • £60,000

  5. Option A has an expected value of £80,000 and initial costs of £30,000. What is the net gain?

    • £30,000
    • £50,000
    • £80,000
    • £110,000

  6. Which of the following is a key limitation of using decision trees?

    • Ignores qualitative factors
    • Excludes probabilities
    • Only uses history
    • Ignores total costs

  7. Which Ansoff strategy involves selling existing products into existing markets?

    • Market penetration
    • Product development
    • Market development
    • Diversification

  8. Selling a new product to an existing customer base is known as what Ansoff strategy?

    • Market penetration
    • Market development
    • Diversification
    • Product development

  9. Entering an overseas market with an existing product portfolio is an example of which strategy?

    • Product development
    • Market development
    • Market penetration
    • Diversification

  10. Which strategy in Ansoff's matrix carries the highest degree of operational risk?

    • Product development
    • Diversification
    • Market development
    • Market penetration

  11. A supermarket launches a price promotion to encourage existing shoppers to buy more. Which strategy is this?

    • Product development
    • Conglomerate growth
    • Market development
    • Market penetration

  12. Apple introducing the Apple Watch to its existing smartphone customer base represents which Ansoff quadrant?

    • Product development
    • Market development
    • Market penetration
    • Diversification

  13. A UK coffee shop chain opening its first outlets in China is using which Ansoff strategy?

    • Diversification
    • Market penetration
    • Market development
    • Product development

  14. A traditional bicycle manufacturer launching an online insurance service is pursuing which strategy?

    • Market development
    • Diversification
    • Product development
    • Market penetration

  15. What must the sum of probabilities at any chance node on a decision tree equal?

    • 10
    • 0.5
    • 100
    • 1

  16. Project X has a net gain of £40,000 and Project Y has £65,000. Which option should be chosen?

    • Both equally
    • Neither project
    • Project X
    • Project Y

  17. Why might a business reject a decision tree recommendation despite a high net gain?

    • Low initial cost
    • High expected value
    • Clear probability
    • High ethical risk

  18. When might Ansoff's matrix conflict with a decision tree recommendation for diversification?

    • Greater market share
    • Higher expected value
    • Unacceptable risk level
    • Lower fixed costs

  19. Why might probability estimates in a decision tree for an innovative product be unreliable?

    • High net gains
    • No historical data
    • Too many options
    • Fixed interest rates

  20. What must a business evaluate alongside quantitative tool outputs to ensure long-term success?

    • Historical interest rates
    • Supplier invoices
    • Corporate objectives
    • Short-term cash flow

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