document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=40937>Question 40937</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Suppose you buy one ticket for a dollar out of a lottery of a 1000 tickets. Where the prize is $500. What is your expected value? </SPAN>\n" );
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document.write( "The formula for the expected value would be:\r<BR>\n" );
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document.write( "Expected Value = (Probability of Winning)*(Prize if won) + (Probability of not winning)*(Prize if not won)\r<BR>\n" );
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document.write( "The price you get if you don't win is 0, so we can ignore the 2nd term. Now, the probability of winning is 1/1000, because you bought 1 ticket out of 1000. Since the prize is $500:\r<BR>\n" );
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document.write( "Exp. Value = (1/1000)*500 = $0.50\r<BR>\n" );
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document.write( "I hope this helps!<BR>\n" );
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