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Unformatted text preview: n the 40th toss, will the casino actually be able to pay you one trillion dollars? This is called credit risk. • Suppose the original condiRons only apply to the ﬁrst 30 tosses. If 30
n>30 then you only win $2 . • Then the expected winnings are • The same result is obtained by assuming that, beyond some very 30 large number ($2 in our example), it makes no diﬀerence to people what the winnings are   i.e., by assuming that the uRlity funcRon is perfectly ﬂat for large winnings (G. Cramer, 1728.) Ilya Pollak...
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This note was uploaded on 09/11/2013 for the course ECE 302 taught by Professor Gelfand during the Fall '08 term at Purdue UniversityWest Lafayette.
 Fall '08
 GELFAND
 Electrical Engineering

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