Gabriel offers to play the following game with you: he will let you roll 1 6...

 

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Gabriel offers to play the following game with you: he will let you roll 1 6 sided die but you must pay him $1 if you roll a 3, $2 if you roll a 2, $3 if you roll a 1, and $0 otherwise. From your point of view, playing this game is like a option with a strike price of → Since you can only lose money, he should be willing to pay you to agree to play this game. How much would be fair? Gabriel offers to play the following game with you: he will let you roll 1 6 sided die but you must pay him $1 if you roll a 3, $2 if you roll a 2, $3 if you roll a 1, and $0 otherwise. From your point of view, playing this game is like a option with a strike price of → Since you can only lose money, he should be willing to pay you to agree to play this game. How much would be fair?

Answer rating: 100% (QA)

From your point of view playing this game is like selling ... View the full answer