Backing out a parlay's hidden leg probability
A three-leg parlay (all legs independent, all must win) is priced at fair no-vig decimal odds of 16.00 - i.e. its total-return multiple equals where is the combined win probability. Two of the three legs are fair coin flips (win probability each). What win probability does the price imply for the third leg? Give a decimal to two places.
Show hints (2)+
- Fair decimal odds , so the combined probability is .
- Independent legs multiply: divide the combined by the two known legs to isolate the third.
Answer
Reveal answer →Final answer
0.25 (± 0.01)
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