Monday 25 January 2010

Bernanke contracts

iPredict's contracts on Bernanke and the Dow suggest, currently:
The DOW currently sits at 10,170.

I take the small gap between the two conditional contracts as indicating folks reckon the DOW will have priced in an eventual Bernanke reappointment, even if it's not by the end of his current term.

There must be an arbitrage play somewhere between Dow futures and iPredict's estimate of the unconditional value of the DOW, but the fixed costs of working it out seem high relative to the stakes.

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