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A poll taken in Massachusetts in October 2012 showed Obama leading Romney by 60% to 40% in the U.S. presidential race. Let's assume that these numbers represent probabilities. I wished to make a bet with my friend on who would win Massachusetts, and we agreed to base our bet on that poll. I predicted a victory for Obama and would win a profit of $10 if I were right. Assuming we wished this to be a fair game, how much should I have agreed to pay my friend if he was right and Massachusetts went to Romney?

Guest Feb 25, 2018
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Here is a website for such things:

https://www.oddsshark.com/tools/odds-calculator

 

You have to bet $15 to win the $10 at 60%

a bet of $15 to win at 40% should win $22.50    (according to the calculator)

 

Perhaps   ?    60% bet  ==    15 x 40/60 = $10 win

                       40% bet  ==    15 x 60/40 = 22.50 win   ??

 

....or another way to look at it...

Total payout on $15 bet

bet on 60%   :    100/60  x $15  = $25 payout ($10 winnings)

bet on 40%   :    100/40  x   15  =   37.20  (22.50 winnings)

ElectricPavlov  Feb 26, 2018
edited by ElectricPavlov  Feb 26, 2018
edited by ElectricPavlov  Feb 26, 2018

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