Question

HELP I NEED THIS ASAP

Answer 1

It should be noted that the expected return on each ticket is $3 and the expected profit is also $3.

Calculating the expected value

From the information given, it was stated that they are selling tickets for $6 each and will sell 900 tickets and that there is one $1,000 grand prize, three $500 second prizes, and twelve $10 third prizes.

Therefore, the expected value will be calculated thus:

E = (1/900 × 1000) + (3/900 × 500) + (12/900 × 10)

E = 2.91 = $3

The expected return on each ticket is $3.

Since the cost of the ticket is $6, the expected profit per ticket will be:

= $6 - $3 = $3

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