Problem 1. Following the Basic Blackjack Strategy in the class notes (handouts) in a 6-deck blackjack, please, choose your most rational action in the following situations:

1. 1. Dealer has: 5; Your hand: A, 3; Choose/circle your action:

Hit;

Stand;

Split;

Double.

1. 1. Dealer has: 2; Your hand: 5, 5; Choose/circle your action:

Hit;

Stand

Split

Double.

Please, explain how can a player have an edge in blackjack if both the player and the dealer follow nearly the same rules and outcomes (such as they can have blackjacks).

Problem 2. Using the class handouts, your notes, and/or Kelly 1956 article, please, derive and write detailed accompanying notes for optimal fractional bet size for slightly tampered with or slightly unfair coin toss betting problem. In other words, derive the Kelly-optimal fixed-fraction bet size. Try to use your own words and thoughts.

Problem 3. Following the class notes (handouts), please, spell out explicitly the following Bloomberg tickers for futures (Name/Contract Description; Expiry Month; Expiry Year):

• ESH6;
• CFG6;
• NGJ6.

Problem 4. Following the class notes, within the framework of our course, what does it mean when we say that we would like to study a financial time series (t)? In other words, what is the basic set of steps that one should be taking to produce inference about a high-frequency financial price series? Give both brief and detailed answers. Try to use your own words and thoughts.