The optimal policy will be to book a round-trip ticket.
Based on the information given, there is a 30% chance that my best friend will be able to provide you with a free one-way ticket as a present. This will be represented on the decision tree as 0.3.
Therefore, the probability that I will not get a free ticket will be 0.7 which is calculated as 0.3 subtracted from 1.
The cost of booking the return ticket on August 1st will be:
= 350 + 370
= 720
In conclusion, the minimum expected travel is $576. The optimal strategy will be to book the round ticket now. An attachment has been attached for further understanding.
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