Question

Suppose the auction house from the preceding problem sold 200 tickets at $1 each, and had 16 prizes of $10 each. What is the new expected value?
A) $0
B) $0.2
C) –$0.2
D) $0.8

Answer 1

The answer is $0.8

200/160=1.25
200+160=360/1.25/160=200.8
so the answer is $0.8

Answer 2

Answer:

Option C

Step-by-step explanation:

Given that the auction house from the preceding problem sold 200 tickets at $1 each, and had 16 prizes of $10 each.

                               With prize             Without prize         Total

    Tickets :                 16                              184                     200

     Prize                      10                                0

     Price                       -1                               -1

     Net prize                 9                               -1

     Price * tickets      144                             -184                    -40

Expected value = -40 dollars

For 200 tickets expected value = -40 dollars

Hence for 1 ticket ev = -40/200 = -0.20

Option c is right