Probability question concerning odd makers and spread

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In summary, the conversation discusses the expected earnings for a bookie who will pay 6$ for every 1$ bet if the person correctly selects the winners, adjusted by a spread, in three games. The spread is defined as the difference in points between the winning and losing team, and when added to the underdog's score, should result in a tie. The homework equations involve calculating the expected earnings using the formula E[x]=sum(x*f(x)). The attempt at a solution involves creating a probability density function for the number of winners selected and their corresponding payouts, taking into account the spread. The expected earnings for the bookie would then be calculated using the formula and accounting for the spread.
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iceblits
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Homework Statement



A bookie will pay you 6$ for every 1$ bet if you correctly select the winners (adjusted by a spread) in three games. What is the bookies expected earnings? (spread is how much the team wins by, and, when added to the underdog's score, should result in a tie)

Homework Equations



E[x]=sum(x*f(x))

The Attempt at a Solution


I'm having trouble getting started and making a probability density function for this because I don't really know how to deal with "the spread". If there was no spread would the pdf look like this?:
X=number of winners selected...money earned by bookie...probability
0.......... $3........ 1/8
1.......... $-3......3/8
2.......... $-9......3/8
3...........$-15......1/8

and then his expected earnings for this would be 3*(18)+(-3)*(3/8)+(-9)*(3/8)+(-15)*(1/8)
 
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  • #2
=-3.375But I'm not sure how to account for the spread in this. Any help would be greatly appreciated!
 

FAQ: Probability question concerning odd makers and spread

What is the role of odd makers in determining probability?

Odd makers are responsible for setting the odds for a particular event or outcome. They use a combination of statistical analysis, expert knowledge, and public opinion to determine the likelihood of a certain outcome occurring.

How do odd makers calculate the spread?

The spread is calculated by taking into account various factors such as team/athlete performance, historical data, and public opinion. Odd makers will also consider any changes in the game, such as injuries or weather conditions, to adjust the spread accordingly.

How accurate are odd makers in predicting outcomes?

Odd makers are highly skilled at predicting outcomes, but their predictions are not always accurate. They use a combination of data and expertise to determine the most likely outcome, but there are always variables that can affect the final result.

Can odd makers manipulate the odds?

No, odd makers cannot manipulate the odds. They are bound by strict rules and regulations that ensure fairness in the betting market. Any attempt to manipulate the odds would result in serious consequences for the odd makers.

How does the spread affect the betting process?

The spread is a crucial factor in the betting process as it determines the potential payout for a bet. A higher spread means a lower chance of winning, but a higher possible payout. A lower spread means a higher chance of winning, but a lower potential payout.

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