SOLUTION: Suppose you buy 1 ticket for $1 out of a lottery of 1,000 tickets where the prize for the one winning ticket is to be $500. What are your expected winnings?
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Question 116159: Suppose you buy 1 ticket for $1 out of a lottery of 1,000 tickets where the prize for the one winning ticket is to be $500. What are your expected winnings?
You can put this solution on YOUR website! Suppose you buy 1 ticket for $1 out of a lottery of 1,000 tickets where the prize for the one winning ticket is to be $500. What are your expected winnings?
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The "Winnings" random variable has values -1 and 499
The associated probabilities are P(-1)= 999/1000; P(499)=1/1000
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Expected Value = -1(999/1000) + 499(1/1000) = -500/1000 = -50 cents
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Cheers,
Stan H.
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