Question

Dida bought a scratch ticket for $2.00. The potential payoffs and probability of those payoffs are shown below.

Answer 1

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Answer:

  (b)  $1.15

Step-by-step explanation:

The expected value is the sum of products of payoff and probability:

  $0×0.15 +0.50×0.5 +1.0×0.2 +2.0×0.1 +10×0.05

  = $0 +0.25 +0.20 +0.20 +0.50

  = $1.15 . . . . expected value of the scratch ticket