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! ""# 25 1.00 0.90 20 0.80 0.70 15 0.60 0.50 10 0.40 0.30 5
! ""#
25
1.00
0.90
20
0.80
0.70
15
0.60
0.50
10
0.40
0.30
5
0.20
0.10
0
0.00
-INF - 0
0.5 - 1
1.5 - 2
2.5 - 3
3.5 - 4
4.5 - 5
5.5 - 6
6.5 - 7
7.5 - 8
8.5 - 9
9.5 - 10
Number of Grades within Range
Cumulative
Question 1
10%
50% 90%
Question 2
10%
50%
90%
Question 3
10%
50%
90%
Question 4
10%
50%
90%
Question 5
10%
50%
90%
Question 6
10%
50% 90%
Question 7
10%
50%
90%
Question 8
10%
50%
90%
Question 9
10%
50%
90%
Question 1
0
10%
50%
90%
-1.00
-0.50
0.00
0.50
1.00

Score on HW Question (./1)

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Red Sox win

$500

 

Bets “Red Sox win”

0.4

$200

Red Sox lose

$0

0.6

 

$200

Red Sox win

$0

 

Bets “Red Sox lose”

0.4

$75

Red Sox lose

$125

 

0.6

Red Sox win

$500

 

Bets “Red Sox win”

1

$500

Red Sox lose

$0

 

Clairvoyant says “Red Sox will win”

0

0.4

Red Sox win

$0

Bets “Red Sox lose”

1

$0

Red Sox lose

$125

 

0

$275

Red Sox win

$500

 

Bets “Red Sox win”

0

$0

Red Sox lose

$0

Clairvoyant says “Red Sox will lose”

1

0.6

Red Sox win

$0

 

Bets “Red Sox lose”

0

$125

Red Sox lose

$125

 

1

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50

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0.6

price goes up

50 40 0.555556 do not exercise option 0.6 price goes up 2 0 90 0.84 0.4

2

50 40 0.555556 do not exercise option 0.6 price goes up 2 0 90 0.84 0.4

0

90

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0.4

price goes down

0 90 0.84 0.4 price goes down 0 40 0.56 0.6 price goes up 100 100
0 90 0.84 0.4 price goes down 0 40 0.56 0.6 price goes up 100 100

0 40

0.56

0.6

price goes up

0 90 0.84 0.4 price goes down 0 40 0.56 0.6 price goes up 100 100

100

100

0.868313

0.4

0.6 price goes up 100 100 0.868313 0.4 100 90 0.838717 exercise option 50 40 0.555556

100

90

0.838717

exercise option

0.868313 0.4 100 90 0.838717 exercise option 50 40 0.555556 do not exercise option Buy option

50

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0.555556

do not exercise option

Buy option

-10

63.76036

0.73

1 $63.76 0.725
1
$63.76
0.725
1
1
option Buy option -10 63.76036 0.73 1 $63.76 0.725 1 3 0 2 0 0.333333 Do

30

20

0.333333

-10 63.76036 0.73 1 $63.76 0.725 1 3 0 2 0 0.333333 Do not Buy option

Do not Buy option

0

59.9254

0.70

price goes down

0 0.333333 Do not Buy option 0 59.9254 0.70 price goes down 30 30 0.455669 $40.00

30

30

0.455669

$40.00 (=50-10)

0.56

$90.00 (=100-10)

0.84

$40.00 (=50-10)

0.56

$20.00 (=30-10)

0.33

$100.00

0.87

$30.00

0.46

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50.000

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2

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-10.000) % . Exercise option 50.000 40.000 0.556 2 Buy option 2 90.000 0.839 0.600 Price

2

90.000

0.839

0.600

Price goes up

Do not exercise option

2 90.000 0.839 0.600 Price goes up Do not exercise option 100.000 90.000 0.839 $67.06 0.743

100.000

90.000

0.839

$67.06 0.743
$67.06
0.743

100.000

0.868

Do Not buy optionoption 100.000 90.000 0.839 $67.06 0.743 100.000 0.868 100.000 Buy option 100.000 0.868 Exercise option 50.000

90.000 0.839 $67.06 0.743 100.000 0.868 Do Not buy option 100.000 Buy option 100.000 0.868 Exercise

100.000

Buy option

100.000

0.868

Exercise option

Exercise option 50.000 40.000 0.556 Do not exercise option

50.000

40.000

0.556

Do not exercise option

option 50.000 40.000 0.556 Do not exercise option 1 30.000 20.000 -10.000 40.000 0.556 0.400 Price
1
1

30.000

20.000

-10.00040.000 0.556 Do not exercise option 1 30.000 20.000 40.000 0.556 0.400 Price goes down 40.000

40.000

0.556

0.400

Price goes down

40.000

0.556

Do Not buy option-10.000 40.000 0.556 0.400 Price goes down 40.000 0.556 0.333 30.000 30.000 0.456 $40.00 (=50-10) $90.00

0.333

0.400 Price goes down 40.000 0.556 Do Not buy option 0.333 30.000 30.000 0.456 $40.00 (=50-10)

30.000

30.000

0.456

$40.00 (=50-10)

$90.00 (=100-10)

$100.00

$40.00 (=50-10)

$20.00 (=30-10)

$30.00

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