Problem bank
Problem 188 of 333MediumFinanceP188
Maximize expected wealth or growth?
A coin lands heads with probability . You may bet any fraction of your current wealth on heads at even money, and you will make 100 bets using the same each time. (a) Which maximizes expected final wealth, and what is the catch? (b) Which maximizes the long-run growth rate? (c) Compare final wealth under and on a path with 60 wins and 40 losses.
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