Question: The New England Patriots are currently a 9.5 point favorite over the New York Jets in their upcoming match this weekend. Suppose the bookmaker offers 11 to 10 odds for bets on this game (so a person must pay $11 to bet $10).
a. If you bet on the Patriots and they win by 7 points, will you win or lose the point spread bet?
b. Suppose there are 100 people betting on each team and the Patriots win by 14 points. Show how much the winners receive, how much the losers pay, and the profit (or loss) of the bookmaker.
c. Now suppose there are 50 people betting on the New York Jets and 150 people betting on the Patriots. Show how much the winners receive, how much the losers pay, and the profit (or loss) of the bookmaker in this case (the Patriots still win by 14 points).