folding_the_nuts
05-22-2007, 09:01 AM
Hi!!
I've got some problems with one of david's calculations!
I don't know if I and my folks are just too stupid for this one or i miss something in the context because English isn't my native tongue.
My problem:
Chapter You're broke You're done:
two bets:
$200 to $100 on a coinflip
$120 to $100 on a coinflip
first bet is described in the book:
Expected value: 0,5 * (-100 $) + 0,5 * (200$) = 50
sounds pretty simple
According to this I Apply this formula on the second bet:
Expected value : 0,5* (-100$) + 0,5* (-120$) = 10
he now claims that if he had the money and would make both bets he would have an EV of 35
That's my problem. At first glance I see that the average of my bets should be 30
Using the old formula:
I would win one time bet 1
I would win one time bet 2
I would lose 2 times ( 1+2)
0,5* (-100$) + (0,25 * 120$) + ( 0,25* 200$) = 30
that's my reasoning
David makes it so without detailed explanations:
0,5* (-100$) + 0,25*( 20$) +0,25 * (320$) which gives us an EV of 35
Can someone help me with this one. I'm pretty pissed off that I don't get this calculation
Formal and informative replies are appreciated
Folding_the _nuts
I've got some problems with one of david's calculations!
I don't know if I and my folks are just too stupid for this one or i miss something in the context because English isn't my native tongue.
My problem:
Chapter You're broke You're done:
two bets:
$200 to $100 on a coinflip
$120 to $100 on a coinflip
first bet is described in the book:
Expected value: 0,5 * (-100 $) + 0,5 * (200$) = 50
sounds pretty simple
According to this I Apply this formula on the second bet:
Expected value : 0,5* (-100$) + 0,5* (-120$) = 10
he now claims that if he had the money and would make both bets he would have an EV of 35
That's my problem. At first glance I see that the average of my bets should be 30
Using the old formula:
I would win one time bet 1
I would win one time bet 2
I would lose 2 times ( 1+2)
0,5* (-100$) + (0,25 * 120$) + ( 0,25* 200$) = 30
that's my reasoning
David makes it so without detailed explanations:
0,5* (-100$) + 0,25*( 20$) +0,25 * (320$) which gives us an EV of 35
Can someone help me with this one. I'm pretty pissed off that I don't get this calculation
Formal and informative replies are appreciated
Folding_the _nuts