Quoto

Learn / Library / Market making

Even roll news

Market makingEasy

A contract pays, in dollars, the number shown on one roll of a fair -sided die. You are told the roll is even. What is the contract's new fair value in dollars?

Checking an answer needs JavaScript. The hint and the solution open without it.

A whole number, a decimal, a fraction like 3/8 or a percent.

Hint

Only the even faces remain possible, all equally likely.

Solution
  1. The remaining faces are , and , each equally likely.
  2. Their average is .
  3. The new fair value is .

Answer: