Martha is playing a coin-toss game in which she tosses two coins. The probability of heads on

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Martha is playing a coin-toss game in which she tosses two coins. The probability of heads on the second coin is correlated with correlation ρ = 0.6 with the probability of heads on the first coin. In this particular game, Martha wins $1 for each heads that she tosses.

• Model one round of 2 coin tosses.

• If she plays 10 rounds of 2 coin tosses each, how much will she win?

• Use Data Table on a blank cell to model 25 cycles of this 10-round game.

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Financial Modeling

ISBN: 9780262027281

4th Edition

Authors: Simon Benninga

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