A market maker quotes a fair coin game. You may pay $10 to enter. If the first heads appears on toss n, you receive 2^n dollars. How should the market maker reason about the price?
Candidate The expected value looks infinite, but a real market maker cannot quote that literally.
Clarification Are we assuming bounded bankroll or a maximum payout?
Self-correction I should separate theoretical EV from a tradable price under risk limits.
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