Answer:
Expected value of raffle = $-0.67
Step-by-step explanation:
Number of tickets sold = 5,000
Selling price of each ticket = $1
1 prize = $500
3 prizes = $300
5 prize = $30
20 prizes = $5
The value of each ticket is given by
value = $500*(1/5000) + $300*(3/5000) + $30*(5/5000 + $5*(20/5000)
value = $0.1 + $0.18 + $0.03 + $0.02
value = $0.33
The expected value is
Expected value = value - selling price
Expected value = $0.33 - $1
Expected value = -$0.67
Therefore, the expected value of this raffle is -$0.67 if you buy 1 ticket.
The negative sign means that you are most likely to lose $0.67 if you buy a raffle ticket for $1.
