Locking In a Riskless Dollar
Shares of Helios Robotics will do exactly one of two things by tomorrow's open: double, or fall by half. Separately, a colleague is happy to take either side of an even-money (1:1) wager on which direction the stock moves. Suppose you put whole dollars into the stock and stake whole dollars on the wager, choosing sides so that your total profit comes out identical whether the stock jumps or drops. What are the smallest whole-dollar values of and that lock in a positive profit either way?
Answer
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