SOLUTION: One thousand raffle tickets are sold for $2.00 each. One grand prize of $500 and two consolation prizes of $100 each will be awarded. Jeremy purchases one ticket. Find his expecte
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Question 455114: One thousand raffle tickets are sold for $2.00 each. One grand prize of $500 and two consolation prizes of $100 each will be awarded. Jeremy purchases one ticket. Find his expected value. Show your work for full credit.
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
One thousand raffle tickets are sold for $2.00 each. One grand prize of $500 and two consolation prizes of $100 each will be awarded. Jeremy purchases one ticket. Find his expected value. Show your work for full credit.
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Random gain values for Jeremy: 498; 98; -2
Corresponding probabilities:::: 1/1000;2/1000;997/1000
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E(x) = [1*498 + 2*98 -2*997]/1000 = -$1.30
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Cheers,
Stan H.
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