You buy a lottery ticket to a lottery that costs $10 per ticket. There are only 100 tickets available to be sold in this lottery. In this lo

Question

You buy a lottery ticket to a lottery that costs $10 per ticket. There are only 100 tickets available to be sold in this lottery. In this lottery there are one $450 prize, two $120 prizes, and four $30 prizes. Find your expected gain or loss. (Round your answer to two decimal places.)

in progress 0
Josephine 2 months 2021-10-13T22:28:08+00:00 1 Answer 0 views 0

Answers ( )

    0
    2021-10-13T22:29:28+00:00

    Answer:

    Loss of $1.20

    Step-by-step explanation:

    The possible outcomes for this lottery and their probabilities are:

    – a 1 in 100 chance of winning $450

    – a 2 in 100 chance of winning $120

    – a 4 in 100 chance of winning $30

    – a 93 in 100 chance of losing $10

    Therefore, the expected value of this lottery when buying one ticket is:

    E(X) = \frac{1}{100}*\$450+ \frac{2}{100}*\$120+ \frac{4}{100}*\$30-\frac{93}{100}*\$10 \\E(X) = -\$1.2

    Therefore, you are expected to lose $1.2 per ticket.

Leave an answer

45:7+7-4:2-5:5*4+35:2 =? ( )