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Baseball betting and probablity

Your favorite baseball team is playing against your uncle's favorite team in the World Series. At the beginning of each game, you and your uncle bet on the game's outcome. Your uncle, being wealthy and carefree, always lets you choose the amount of the bet. If you bet b dollars and your team wins the game, your uncle gives you an IOU for b dollars. But if they lose the game, you give him an IOU for b dollars. When the series is over, all outstanding IOUs are settled in cash. You would like to walk away with \$100 in cash if your team wins the series, and lose \$100 if your team loses the series. How much should you bet on the opening game? (For non baseball fans, the first team to win a total of four games wins the series).

Can somebody please explain how did they get value 31.25 using binomial tree.

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    Who is the "they" who got the value 31.25?2012-07-19
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    on forum I find answers , but dont know how did they calculate this amount using binomial tree.2012-07-19
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    **Which** forum?2012-07-19
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    http://math.stackexchange.com/questions/69086/baseball-betting-and-probablity2012-07-19
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    hamna, please don't reask questions that have already been asked here. They will just get closed as duplicates. If you don't understand part of an answer to a question that's been answered, you can ask a new question, linking to the previous one and explaining specifically what part of the answer you don't understand. Just copying the question without linking to the earlier one wastes everyone's time.2012-07-19
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    There is no mention of binomial trees among the answers to the previous question (of which this is an exact duplicate). What leads to you bring binomials into the picture?2012-07-19
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    (It is true enough that the answer happens to be something like $1-2^{-(n+1)}\binom{2n-3}{n-1}$ times the desired final score, but that connection was not made explicitly made in the previous question. Where did _you_ get it?)2012-07-19
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    I check two to three sites by searching this question, you can do same thing by putting some text of this question , first three links i believe discuss the answers of this problem and everybody giving the answer of first bet 31.25. My problem is this I could not figure out how did they calculate this amount.2012-07-19
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    Is there anything *specific* about Did's answer (in the thread you linked to) that you don't understand?2012-07-19
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    What exactly don't you understand from the answers you have looked at?2012-07-19

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