Dynamic Programming Recap

This lecture covers a recap of dynamic programming, focusing on elements of modeling such as horizon, state & action space, terminal cost, and transition dynamics. The instructor explains the optimal betting strategy in a gambling problem using dynamic programming, showing that the gambler should stake 1/3 of their money each round. The correctness of the strategy is verified for different scenarios, including when the probability of winning is 1. The expected logarithm of the terminal capital is calculated under the optimal betting strategy.