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Betting Lines

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Just curious as to how these are calculated. My Arizona team finished 3-8 (1-7) in an extremely tough Pac-10 and we were favorites in almost every game, including 5 point favorites over a top 20 team (Wash St) who was #4 in both offense and defense at the time (we were #111 and #87). Does it have to do with talent or team performance? I honestly cannot see why were favorites.
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