18.44 Lecture 1: 18.600 Feb 3, 2016 (Lecture 1)
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Suppose that betting markets place the probability that your favorite presidential candidates will be elected at 58 percent. Price of a contract that pays 100 dollars if your candidate wins is 58 dollars. Market seems to say that your candidate will probably win, if probably means with probability greater than 0. 5. The price of such a contract may uctuate in time. Let x(t) denote the price at time t. Suppose x(t) is known to vary continuously in time. X(t) will go below 50 at some future point. X(t) will get all the way below 20 at some point. X(t) will reach both 70 and 30, at different future. X(t) will reach 65 and 65, at different future times. X(t) will hit 65, then 50, then 60, then 55. How many ways are there to distribute n hates, to k < n people. A permutation is a map from {1, 2, , n} to {1, 2, , n}
