SOLUTION: Suppose you buy 1 ticket for $2 out of a lottery of 500 tickets where the prize for the one winning ticket is to be $100. What is your expected win/loss? a) $23.20 b) -

Algebra ->  Probability-and-statistics -> SOLUTION: Suppose you buy 1 ticket for $2 out of a lottery of 500 tickets where the prize for the one winning ticket is to be $100. What is your expected win/loss? a) $23.20 b) -      Log On


   

Question 841599: Suppose you buy 1 ticket for $2 out of a lottery of 500 tickets where the prize for the one winning ticket is to be $100. What is your expected win/loss?

a) $23.20
b) -$1.80
c) $21.00
d) -$0.80

Found 2 solutions by ewatrrr, stanbon:
Answer by ewatrrr(24785) About Me  (Show Source):
You can put this solution on YOUR website!
 

Hi,

Suppose you buy 1 ticket for $2 out of a lottery of 500 tickets 

where the prize for the one winning ticket is to be $100.

What is your expected win/loss?

 1%2F500+=+.002 chance of winning.  Chance of losing 499%2F500

E = .002*98 - (499/500)*2 = $ -1.80

Answer by stanbon(75887) About Me  (Show Source):
You can put this solution on YOUR website!
Suppose you buy 1 ticket for $2 out of a lottery of 500 tickets where the prize for the one winning ticket is to be $100. What is your expected win/loss?
------
Random winning numbers::.....98..........-2
Associated probabilities:....1/500.....499/500
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E(x) = [1*98 - 2*499]/500 = -900/500 = -9/5 = -$1.80
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Cheers,
Stan H.
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a) $23.20
b) -$1.80
c) $21.00
d) -$0.80