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Probability

Expected number of profitable trades

expected-valuelinearityindicator-variablesfinance

A desk places 4 trades today. Based on the models, they each turn a profit with probabilities 0.550.55, 0.600.60, 0.450.45, and 0.700.70 respectively.

On average, how many of the 4 trades are profitable?

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Linearity of Expectation, Even Without IndependenceThe ABRACADABRA ProblemThe Card-Pack Trading GameThe Coupon-Collector ProblemCraps: Working Out the House Edge

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