<PRE><B>Question 479070</B>
In a game of chance if you purchase one ticket out of the 100 tickets being sold at a cost of $5.00 how much money would you expect to win taking into consideration the cost of the ticket. The winning prize is $500?
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E(gain) = (1/100)495 + (99/100)(-5) = (495-495)/100 = 0
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If I purchase two tickets instead of one ticket at the same cost of $5.00 each, how much money would I expect to win, taking into consideration the cost of the tickets if the winning prize is $500.
E(gain) = (2/100)490 +(98/100)(-10) = (980 - 980)/100 = 0
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Which of these games, if any, are fair?
Ans: Both are fair.
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Cheers,
Stan H.
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