The question came in three parts and was verbally stated so
please excuse my poor interpretation, i will try to provide more clarity
Part1 was to work out average rate of return, given the stated stakes and probabilities, which i worked out as 33.3%.
The second part was to draw a graph with...
The Sigmoid like function i referred to can be seen
here(http://en.wikipedia.org/wiki/Sigmoid_function )
If 1 on the y-axis represents certain probability of us
getting our 33.3% return.
Then as the function tends toward 1
it becomes more likely we shall receive our 33.3%
I apologize...
A game has two outcomes win or lose, the probability of winning is 1/3 and
the probability of losing is 2/3, if i win i will receive 3 units but if i
lose i will lose 1 unit, I've calculated that the average rate of return on
this game is 33.3%. Over time it becomes more likely that i will...