Professor Mark J. Perry's Blog for Economics and Finance
Posted 9:00 AM Post Link
How comes the sum is over 100%? mL
mL: There are 23 separate Intrade contracts for Secretary of the Treasury right now, and there is no reason that the sums have to add up to 100%. As the decision gets closer and trading volume increases, the sum might be closer to 100%. When there are only two outcomes (like McCain and Obama for president), it would be more likely that the sum is 100% for the two contracts.
I don't have an Intrade account so I offer this potential arbitrage for free to those who do: if the collective bids on the whole pool add up to more than 100% short the whole pool. Whatever you collect in excess of 100% (less transaction costs) is guaranteed profit.A word of caution: my advice is free and you get what you pay for.
Depression dead ahead, same failed policies that got us into this mess used by the same clowns.
Volcker would send the LaRouche people into a tizzy.
Hmmm, I wonder why Gov. Granholm's name isn't in the running...After all look what an amazing job she's done for Michigan...Granholm is at least as good a liar as Obama...
Post a Comment
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan.
Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
View my complete profile