Consider the toss of a (loaded) coin. In a "good" outcome, punter (bettor) will receive...
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Consider the toss of a (loaded) coin. In a "good" outcome, punter (bettor) will receive 1 in 12 months. In a "bad" outcome she will not receive anything. The fair market price of this bet is 0.45 and current prevailing risk-free interest rate is 5%. What is the implied probability of a "good" outcome? Assume continuous compounding. (A) 0.4223 B 0.4731 0.5269 0.5594
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