Kelly Fraction

Problem

Compute the Kelly fraction for a bet with win probability p and payoff odds b: f = (p * b - (1 - p)) / b.

Return 0.0 when b is not positive. A negative result means the bet has no edge.

Hint

The Kelly fraction maximizes expected logarithmic growth.

case 1

in: [0.6,2]

expected: 0.39999999999999997

case 2

in: [0.5,1]

expected: 0

case 3

in: [0.4,2]

expected: 0.10000000000000003

case 4

in: [0.6,0]

expected: 0

Starter codePython

def kelly_fraction(p, b):
    # Your code here
    pass

4 test cases · run your code against them in the editor