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Old 12-04-2005, 11:44 PM
AaronBrown AaronBrown is offline
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Join Date: May 2005
Location: New York
Posts: 505
Default Re: RoR -- What % loss before double?

I'm not sure I understand the situation. I think you're making a series of identical bets. Your expected profit from each one is fixed at 0.1% of your initial bankroll. To make it concrete, you start with $1,000 and make bets on which you have an expected profit of $1. You want to know the expected minimum point before you get up to $2,000.

Obviously this depends on the standard deviation of the individual bets. If that standard deviation is zero, if you just get $1 each time, then $1,000 in your certain minimum. If, instead, you're betting $1,000 for one chance in 1 million of getting $1,001,000,000, then you've got a 0.999999 chance of hitting zero before going above $2,000.

Let's say you have 0.55 chance of winning $10 and 0.45 chance of losing $10 each time. Your average minimum point is about $955. 18% of the time you'll never be behind, and 70% of the time, you'll never be below $950. 89% of the time you'll never be below $900 and 98% of the time you'll never be below $800.
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