Question

A lottery ticket has a grand prize of $31 million. The probability of winning the grand prize is .000000018. Determine the expected value of the lottery ticket.

Answer 1

Answer:

$0.558

Step-by-step explanation:

The expected value is the sum of the value of each outcome times the chance that it happens. In this case, there are two outcomes:

1. Win $31 million
2. Win $0

Then our expected value can be calculated as:

$EV=(31,000,000)(0.000000018)+(0)(1-0.000000018)=0.558$