Question

1. You are investing in stocks in the Binary Exchange, which has only two stocks. On each day, you either stay with your current stock, or sell all your stocks and invest all your money into the other stock. On each day, the price of one stock is multiplied by 0.25, and the price of the other stock is doubled. You have 64 financial advisors that on each day tell you how the prices of each stock will change for the next day. An effective financial advisor will always be correct. All of the financial advisors think they are effective, but at least one really is. You start with $1000. Describe a strategy such that after 28 days, you are guaranteed to be a millionaire, and explain your answer

Answer 1

Initial Amount: $1000

Target amount: minimum $1000000

There is a 50% chance that we will guess and invest in a stock which will double itself the next day. Assuming, we choose that one every single time, we would need to invest in correct stock for at least 10 days for our $1000 bucks to become a million(1,024,000 to be accurate.)

Assuming we always get the stock which will increase its value times .25, we would never be able to make a million dollar by the end of 28 days.

if we factor out the effect of advisers on our decision, and if we stick to one stock for 28 days, there is a 50% chance we get the stock right for around 14 times, which will be enough for our target.

Factor in the impact of advisors, we may choose to follow the advise if most of them agree on one stock.

So if we use the financial advises on top of our sticking to one strategy, we can improve the chances to get to a million dollars.