Capital=All of your money.(adsbygoogle = window.adsbygoogle || []).push({});

Investment= Portion of your money invested per unit ( day/month/hand/game)

RoR= Odds that you will go broke

RoR@X= Odds that your Capital will be less than Unit of Investment before reaching X.

ROI= Return on investment, measured by percentage per unit of investment, represents your edge.

Odds= Ratio of money invested to potential winnings.

Equity= Portion of the potential winnings that is ours on expected value, affected by ROI. (1/2 for a coinflip 1/6 for dices etc…)

Calculated by “Equity= Odds+ROI.Odds”

This is only for calculating winner takes all scenarios.

I have only figured so far formulas for situations where Capital=Investment.

So if

X= 2Capital

Capital=1

Investment=1

ROI=3%

Odds= ½

Then

First we calculate our equity

1/2+3%/2 = 51.5%

RoR@X= 100-51.5%= 48.5%

So formula is

RoR= 100%-(Equity)

What would an appropriate formula that takes into consideration Capital to investment ratio be.

I can only struggle to figure that there is a factor where the higher the ratio is the closer it will bring the edge to 100%:

Following the same variables as before but:

Equity=1/4

Then I calculate the reverse of the equity.

Feq= 1-1/4

(? Is a mysterious operator)

25%+3%?factor.Feq

25%+ 99.999.Feq

25%+ 99.999.3/4

25%+ 75%

25

Somehow…

My question is, what is the factor and how does it act?

What would the formula be?

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# Homework Help: Formula for RoR with ROI and Capital to investment ratio.

Can you offer guidance or do you also need help?

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