When the horse Super Saver won the 136th Kentucky Derby, a $2 bet that Super Sav

Question

When the horse Super Saver won the 136th Kentucky Derby, a $2 bet that Super Saver would win resulted in a return of $18.00.

a. How much net profit was made from a $2 win bet on Super Saver?

b. What were the payoff odds against a Super Saver win?

c. Based on the preliminary wagering before the race, bettors collectively believed that Super Saver had a 0.093 probability of winning. Assuming that 0.093 was the true probability of a Super Saver victory, what were the actual odds against his winning?

d. If the payoff odds were the actual odds found in part c), how much would a $2 win ticket be worth after the Super Saver win?

Explanation / Answer

a) Net Profit = $18 - $2 = $16

b) Payoff odds = net profit : amount bet = $16 : $2 = 16 ÷ 2 = 8 = 8:1 You have to reduce it and then convert the answer to a fraction in your calculator

c) Winning probability = 0.093 = 93/1000

Odds against winning would be: Number of games lost to Number of games won 907/93 (93 wins, 907 losses)

d) $907 profit + original $2 bet back = $909

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