Homework #4 Prediction Markets

Here is my list of 10 prediction markets that I found using Intrade.com, in no particular order.

I am just pretending to trade, without actually logging into the account.
Of these 10 contracts, there are 2 that I think are currently valued too low (if only a little)

• Drilling.Moratorium.2010
• AR.Senate2010.Rep

 


 

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  The current price for a contract in the Drilling Moratorium is $7.50.
• 
  
  The price for a contract in the Senate Race (Rep) is $9.49.
• 
  
  I will choose to invest my $1,000 in both of these; I will also take a (hopefull) longshot at the following prediction:

 

• Currently, a contract for this prediction costs $0.76. 

•  I will split the $1000 the following way:
• I will spend $700 on the Senate Race (buy 74 contracts)
• I will spend another $200 on the Off Shore drilling (buy 26 contracts)
• the last $100 I will spend on Finding Osama Bin Laden (buy 131 contracts)