Three-way arbitrage on a soccer match
A soccer match has three outcomes: home win, draw, away win. Shopping across several books, the best available decimal odds are on home, on the draw, and on away.
Is there a riskless profit? If so, how do you split a \1000$ bankroll across the three outcomes, and what is the guaranteed return?
Show a hint
Add the three implied probabilities (). Below means the market, in aggregate, is priced too cheap.
Your answer
This one is open-ended. Work it through, then check your reasoning against the full solution.