Question 445837
Ten thousand raffle tickets are sold for $5 each. Four prizes will be awarded: one for $5000, one for $2500, and two for $1000. Assume that the probability that any given ticket is selected for the $5000 prize is 1:10000 the probability that any given ticket is selected for the $2500 prize is 1:10000 and the probability that any given ticket is selected for a $1000 prize is 2:10000. 
a) Determine his expected value.
E(x) = [4995 + 2495 + 2*2(995)+ 9996(-5)]/10000 = $5.40
-------- 
b) Determine the fair price of a ticket.
If each tick cost $10.40 the game would be "fair".
That means the players expected gain would be zero
and his expected loss would be zero.
======================
Cheers,
Stan H.