A Football Game Official Tosses a Coin at the Beginning

question 52

Essay

A football game official tosses a coin at the beginning of each game to determine who will have possession of the ball first. In the previous ten games the toss has come up tails four times. The official says the probability that the coin will come up tails again is 40%. Is the official referring to a theoretical probability or an empirical probability? Explain.

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Definitions:

Interest Rate Futures

Financial derivatives contracts that speculate on the future level of interest rates, allowing investors to hedge or speculate on changes in interest rates.

Eurodollars

U.S. dollar-denominated deposits held in banks outside the United States, not under the jurisdiction of the Federal Reserve, used in international transactions.

Euroyen

Yen-denominated deposits held in banks outside Japan, or bonds issued in the Tokyo market by non-Japanese entities, typically denominated in yen.

Metals

Solid elements that are hard, shiny, malleable, ductile, and conductive, often used in construction and manufacturing.