Question: Consider an experiment with four possible outcomes, & assume that the quoted odds for the first three of these outcomes are as follows:
|
Outcomes
|
Odds
|
|
1
|
2
|
|
2
|
3
|
|
3
|
4
|
What must be the odds against outcome four if there is to be no possible arbitrage when one is allowed to bet both for & against any of the outcomes?