Solution Found!
Suppose that you are gambling against an infinitely rich
Chapter 3, Problem 14TE(choose chapter or problem)
QUESTION:
Problem 14TE
Suppose that you are gambling against an infinitely rich adversary and at each stage you either win or lose 1 unit with respective probabilities p and 1 − p. Show that the probability that you eventually go broke is
where q = 1 − p and where i is your initial fortune.
Questions & Answers
QUESTION:
Problem 14TE
Suppose that you are gambling against an infinitely rich adversary and at each stage you either win or lose 1 unit with respective probabilities p and 1 − p. Show that the probability that you eventually go broke is
where q = 1 − p and where i is your initial fortune.
ANSWER:
Step 1 of 2
Here we have to show that