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Suppose that you are gambling against an infinitely rich

Chapter 3, Problem 14TE

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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:

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