This function calculates the expected return on investment (ROI) for a given bet.
Usage
expected_roi(payout, risk, win_prob)
Arguments
- payout
The dollar amount won if the bet pays out (500)
- risk
The dollar amount risked (550)
- win_prob
The probability that the bet wins (0.54)
Value
Expected Return on Investment
Examples
expected_roi(100, 110, 0.55)
#> [1] 0.05
expected_roi(175, 100, 0.35)
#> [1] -0.0375