SOLUTION: I am not sure of this answer; is it corret? Thank you! 5. (3 pts) 500 raffle tickets are sold at $2 each. One grand prize of $100 and two consolation prizes of $50 will be aw

Algebra ->  Proofs -> SOLUTION: I am not sure of this answer; is it corret? Thank you! 5. (3 pts) 500 raffle tickets are sold at $2 each. One grand prize of $100 and two consolation prizes of $50 will be aw      Log On


   

Question 145210This question is from textbook
: I am not sure of this answer; is it corret?
Thank you!
5. (3 pts) 500 raffle tickets are sold at $2 each. One grand prize of $100 and two consolation prizes of $50 will be awarded. Find Jake’s expectation if he purchases one ticket.
100(1/500) + 50*(2/500) – 2*(497/500) = (200-994)/500 = - 1.58
A) -$0.40 B) -$1.20 C) -$1.60 D) $7.75 E) $0.80
 This question is from textbook

Answer by jim_thompson5910(35256) About Me  (Show Source):
You can put this solution on YOUR website!
Expected Value:

100%281%2F500%29+%2B+50%2A%282%2F500%29%2B0%2A%28497%2F500%29=%28200%29%2F500=2%2F5=0.4


So he expects to earn $0.40

However, since they paid $2, this means that

0.40-2.00=-1.60


So they really expect to lost $1.60


So the correct answer is C)