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Home » Mathematics » High School Pre-Olympiad (Ages 14+)
 
Expected value of a bet
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klzxcv
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#1
Expected value of a bet
For some reason, the question is not parsing properly in this textbox. I've added a txt attachment. thanks!
Last edited by klzxcv on Sat Nov 07, 2009 4:17 pm; edited 1 time in total 
PostPosted: Sat Nov 07, 2009 10:36 am  Back to top 
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JBL
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#2
It's the dollar signs -- they're used on the forum to create LaTeX codes. (See LaTeX and http://www.artofproblemsolving.com/Forum/viewtopic.php?t=123690 for info.) Get rid of the dollar signs and it will be fine.

Quote:
The price for a bet on New York Yankees winning is USD79.97; the price for a Philadelphia Phillies winning is USD20.03 . Securities for the winning team pay off USD100.

(a) At this point, the Phillies will win only if they win both the next two games (games 6 and 7). Suppose you believe that there is a 60% chance of them winning game 6; if there game 7 is held, you believe there is a 50% chance of the Phillies winning it. Given these beliefs, what is the expected value of a Philadelphia Phillies bet (right now)?

(b) Given the same beliefs as in part (a), suppose that you bought one Phillies bet at the market price of USD20.03. What would your expected profit be?


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Joel
Hi Deeps! <3

PostPosted: Sat Nov 07, 2009 11:38 am  Back to top 
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klzxcv
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#3
both parts...I'm not sure how to proceed

PostPosted: Sat Nov 07, 2009 2:47 pm  Back to top 
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