Implied Probabilities and Bookmaker Overround

Finance · Easy · Free problem
A sportsbook quotes decimal odds of $O_A = 1.72$ on Team A and $O_B = 2.35$ on Team B for a game where exactly one team wins. 1. Compute the implied probability of each outcome from the posted odds. 2. Calculate the bookmaker's overround (also called the "vig" or "juice") -- the margin baked into these quotes. 3. Determine the no-arbitrage range of "fair" win probabilities for Team A that are consistent with these two quotes.

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