Fair odds on a parlay
Two independent events each have probability 25%. A parlay pays out only if both events occur. At fair odds, what is the profit (in dollars) on a winning $1 stake? Give the answer to the nearest dollar.
Show hints (2)+
- Multiply the independent probabilities first: .
- Fair total return is ; profit is that minus the $1 stake.
Answer
Reveal answer →Final answer
15
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Asked at: Options Market-Making, ETF Market-Making