Tuesday, November 15, 2005

Not Quite Free Lunch

Winter drawers on, and that nice Mr Fawkes becomes ever more solicitous of our welfare. Indeed he's offered to buy us lunch at some pricey wood panelled joint up West- a touching act of generosity so typical of the man.

But someone much wiser than I once warned me about free lunches, particularly when they're proffered by Papist conspirators. And sure enough, my legal advisor pointed out the smallprint: in the highly unlikely event that DD were to lose the contest, I'd have to pay, rather than Guido.

So I had the Tyler derivatives team look over the whole deal. And they reckon that once it's marked to market, it's not free at all!

I won't bore you with all the tedious arithmetic, but it turns out the market is now pricing DC's probability of winning at 92%, and DD's at only 8%. Which means that fair odds for Guido's bet- for such it is- are about 11.5/1. Some way from the evens on offer from "Honest Gui".

So I've offered him an alternative. If DD wins he stands us both lunch at that posh place; if DC wins I stand us lunch at the Upper Crust on Waterloo Station (chef's signature dish- All-Day Breakfast Baguette).

Can't say fairer than that.


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