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Parlay card betting. Odds makers try to predict which
Chapter 4, Problem 39E(choose chapter or problem)
Problem 39E
Parlay card betting. Odds makers try to predict which professional and college football teams will win and by how much (the spread). If the odds makers do this accurately, adding the spread to the underdog’s score should make the final score a tie. Suppose a bookie will give you $6 for every $1 you risk if you pick the winners in three games (adjusted by the spread) on a “parlay” card. Thus, for every $1 bet, you will either lose $1 or gain $5. What is the bookie’s expected earnings per dollar wagered?
Questions & Answers
QUESTION:
Problem 39E
Parlay card betting. Odds makers try to predict which professional and college football teams will win and by how much (the spread). If the odds makers do this accurately, adding the spread to the underdog’s score should make the final score a tie. Suppose a bookie will give you $6 for every $1 you risk if you pick the winners in three games (adjusted by the spread) on a “parlay” card. Thus, for every $1 bet, you will either lose $1 or gain $5. What is the bookie’s expected earnings per dollar wagered?
ANSWER:
Solution:
Step 1 of 2:
Suppose a bookie will give you $6 for every $1 you risk if you pick the winners in the three games on a “parlay” card.
For every $1 bet, you will either lose $1 or gain $5.
We have to find bookie’s expected earnings per dollar wagered.