1. There are two candidates Don and Joe, running in an Election, where only 1 candidate can win. According to prediction market bookies, Don has odds of 1: 2.5, i.e. for every $1 you bet on Don and he wins, you receive $2.5 (Payoff). If Don Loses, you get nothing (Payoff = 0). Similarly, the odds for Joe are 1:1.8. Assume that the risk-free rate is 0.0%.

1. Compute the markets assessment for the Probability that Don will win.

Please show all work. Thanks