Answer:
−0.955
Explanation:
Given the following :
Worth of placing a registered bet = $1
1st price = $50,000
2nd price = $20,000
Total bets received = 2,000,000
Net winning :
Winning - worth of placing a registered bet
Ist price = $50,000 - $1 = $49,999
2nd price = $20,000 - $1 = $19,999
Amount lost = - $1
number of losers = 2,000,000 - 3 = 1,999,997
Probability :
Probability = (required outcome / Total possible outcomes)
Number of 1st price winners = 1
Number of second price winners = 2
P(1st price) = 1 / 2,000,000
P(2nd price) = 2/ 2,000,000 = 1/ 1,000,000
Therefore ;
Net winning (x) - - 49,999 - 19,999 - - - (-1)
P(winning) p(x) - - 1/2mill - - 1/1mill-- 1999997/2mill
Expected winnings = sum of [(x) * p(x)]
= ($49,999 * 0.0000005) + (19,999 * 0.000001) +(-1 * 0.9999985)
= 0.0249995 + 0.019999 − 0.9999985
= 0.0449985 - 0.9999985
= - 0.955
