SOLUTION: Sam bought 1 of 250 tickets selling for \$2 in a game with a grand prize of \$400. Was \$2 a fair price to pay for a ticket to play this game? Thanks for your help.

Algebra ->  Algebra  -> Probability-and-statistics -> SOLUTION: Sam bought 1 of 250 tickets selling for \$2 in a game with a grand prize of \$400. Was \$2 a fair price to pay for a ticket to play this game? Thanks for your help.      Log On

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 Algebra: Probability and statistics Solvers Lessons Answers archive Quiz In Depth

 Question 201968: Sam bought 1 of 250 tickets selling for \$2 in a game with a grand prize of \$400. Was \$2 a fair price to pay for a ticket to play this game? Thanks for your help.Answer by stanbon(57978)   (Show Source): You can put this solution on YOUR website!Sam bought 1 of 250 tickets selling for \$2 in a game with a grand prize of \$400. Was \$2 a fair price to pay for a ticket to play this game? ------------------------ Let the Random variable be "Gain to the buyer" Random Variable Values: -2, 398 Corresponding Probabilities: (249/250) and (1/250) --- Expected Value: (-2)*(249/250) + (2)(1/250) = -\$1.98 --------------- You can expect to lose \$1.98 ================================= Cheers, Stan H.