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Old 09-06-2007, 08:35 PM
Tweety Tweety is offline
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Join Date: May 2007
Posts: 211
Default A-Rod total home runs

Early in the season, I made a bet with a friend of mine on A-Rod's regular season home run total for this year. I bet my friend $1,000 that A-Rod would hit fewer than 52.5 home runs this year.

Obviously, I'm underwater on this bet right now. My friend has made me an offer to get out of the bet. I won't say what his number was right away- I'd like the mathematicians of this forum to do their best to price out what his marked to market p+l is on his position, and give me the number.

Obviously determining the fair value isn't all that easy. You can pro-rate his home run rate over the rest of the year, but do you use his home run rate this year or his career home run rate? Also, you have to look at the opposing teams he'll be facing between now and the rest of the season and the caliber of their pitching, you have to factor in injury risk, and then you have to factor in the risk of him getting benched if the Yanks clinch. Lots to think about here.

I'd like to see what people here come up with, then I'll let everyone know what his offer was and we can see if it's good. Today is Thursday and the yanks are idle. So I have until game time tomorrow to decide.

Thanks in advance for helping me out with this.
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