SOLUTION: You are asked to buy a ‘lucky draw’ ticket with the price of RM2. You can win RM5000 as first prize,
RM1000 as second prize or RM500 as third prize with probabilities of 0.0
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-> SOLUTION: You are asked to buy a ‘lucky draw’ ticket with the price of RM2. You can win RM5000 as first prize,
RM1000 as second prize or RM500 as third prize with probabilities of 0.0
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Question 1175195: You are asked to buy a ‘lucky draw’ ticket with the price of RM2. You can win RM5000 as first prize,
RM1000 as second prize or RM500 as third prize with probabilities of 0.0001, 0.0005 and 0.0015 respectively.
Basing your decision on the expected value, should you buy the ticket? Why? Found 2 solutions by ewatrrr, ikleyn:Answer by ewatrrr(24785) (Show Source):
Hi
Finding the 'Expected Value' of the RM 2 Investment:
5000(.0001) + 1000(.0005) + 500(.00015) = .5 + .5 + .75 =
Ticket casts RM2: Buy a ticket ?
NO, As RM 1.75 < RM 2
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