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?
-----------------
The "Winnings" random variable has values -1 and 499
The associated probabilities are P(-1)= 999/1000; P(499)=1/1000
-----------------------------
Expected Value = -1(999/1000) + 499(1/1000) = -500/1000 = -50 cents
==============================
Cheers,
Stan H.