Question

Tickets for a raffle cost $13. There were 810 tickets sold. One ticket will be randomly selected as the winner, and that person wins $1100 and also the person is given back the cost of the ticket. For someone who buys a ticket, what is the Expected Value (the mean of the distribution)?

Answer 1

Answer:

$ -11.61

Step-by-step explanation:

The expected value in this case would be the subtraction between the probability that the draw will win for its value (the prize + value of the ticket) and the value of the ticket for the probability of not winning the draw, thus:

(1/810) * (1100 + 13) - (809/810) * (13)

1,374 -12,984 = -11.61

which means that the expected value is $ -11.61