What occurs at chance nodes in a decision tree?

At chance nodes in a decision tree, uncertain events occur, which makes this the correct answer. These nodes represent situations where the outcome is not guaranteed and can vary based on probability. For instance, when modeling a decision-making process involving risk, a chance node might illustrate various potential outcomes resulting from an uncertain event, such as market fluctuations or weather conditions, each with an associated probability of occurring.

In contrast, guaranteed outcomes would not apply here, as chance nodes specifically deal with uncertainty rather than assured results. Key decision points are typically found at decision nodes, where a decision-maker must choose between different actions. Fixed payoffs are often associated with deterministic outcomes rather than the variability represented at chance nodes. Therefore, the essence of chance nodes lies in their ability to capture uncertainty and the probabilities of various outcomes, which is critical in decision-making processes that involve risk analysis.