Question

You place a $100 bet on a card draw from a 54-card deck that has both jokers. You place the $100 on the table saying the card will be red. Thus, you believe the next card to be drawn will be red. The pay for a win is 1:1.

1. How much will you collect from the table if a red is drawn?

2. When you claim your money from the table, is the money received profit or a return? Explain.

3. Was the bet odds on, odds against, or even money? Explain.

4. What does the 1:1 payoff odds tell you about the red?

Answer 1

1. If a red is drawn, you will collect $200 from the table. This is because you collect $100 that you had bet + $100 that you won. (1:1 payoff means that you receive your original bet + 1×original bet, where the numerator represents the multiplier for the bet that you win)

2. The money received on winning in the return as it contains $100 of your bet + $100 profit from winning the bet.

3. As their is an equal change of winning/losing, this bet is even money.

4. 1:1 payoff tells us that there is equal odds of the card being red or black, and hence there is an equal chance of winning and losing.