What is the difference? 9/4 - 1/7
2 answers:
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Answer:
The expected value of the winnings for a single-ticket purchase is -$1.0016.
Step-by-step explanation:
The total number of tickets sold is, <em>N</em> = 1250.
Cost of one ticket is, $4.
Let <em>X</em> = amount of prize.
The prize distribution is as follows:
1 Grand price = $3000
1 Second prize = $450
10 Third prize = $25
The expected value <em>X</em> can be computed using the formula:
Compute the probability distribution of <em>X</em> as follows:
Prize Amount (X) P (X) x · P (X)
1 Grand prize $3000
1 Second prize $450
10 Third prize $25
No prize -$4
TOTAL 1.0000 -1.0016
Thus, the expected value of the winnings for a single-ticket purchase is -$1.0016.