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3

The general formula for conversion of "a to b" odds to a probability is $p=\frac{b}{a+b}$ http://www.calculatorsoup.com/calculators/games/odds.php So 8/15 remain implies remain with probability 0.652 8/4 for leave implies leave with probability 0.333 The amount 1-0.652-0.333 = 0.0145 represents the bid-ask spread or loss that you suffer (and the other ...

-1

It's 6/4 to leave right now. Hence, the implied probabilities are 6/10 = 0.6 to leave and 8/23 to stay. So it's about 2/3 to leave, 1/3 to stay. You can't do much better, since you don't know number of bets and the profit margin for the venue.

0

Overall you are not mistaken, although it is worth revisiting a few steps in your question. We assume $S$ follows the SDE $$\dfrac{dS}{S} = \mu\:dt+ \sigma\:dW^\mathbb{P}(t)$$ under the physical measure $\mathbb{P}$. If we change to the risk neutral measure $\mathbb{Q}$ (using Girsanov's theorem) then $\mu \to r$ and we have the following SDE  \dfrac{dS}...

5

I have had a read through the paper that you quoted and have the following comments which you might find helpful: (I am formally trained in QM, so hopefully there shouldn't be any errors in the physics portions of the answer, but if there are any questions then please comment). A few comments about Quantum Mechanics (QM): Quantum mechanics is a physical ...

1

$\,\,\,$Generally, Finance involve some degree of uncertainty, so we need to use probabilistic reasoning in order to make a sound decision. Nowadays, we need to apply modern probability in each part of finance and this issue is too widespread.However, I introduce some useful articles and books: Levy processes: From probability to finance and quantum ...

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