Question

When the horse California Chrome won the 140th Kentucky Derby, a $2 bet on a California Chrome win resu lted in a winning ticket worth$7. What were the payoff odds against a California Chrome win?

Solution

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payoff odds =net profit(amount bet)=52=5:2=\dfrac{\text{net profit}}{(\text{amount bet})}=\dfrac{5}{2}\\\\=5:2

To calculate the payoff odds, find the ratio of the net profit (if you win) to the amount bet. Since you must pay $2 to bet, the net profit would be $5. The ratio of the net profit to the amount bet is therefore 5:2.

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