Question

Five thousand tickets are sold at​ $1 each for a charity raffle. Tickets are to be drawn at random and monetary prizes awarded as​ follows: 1 prize of ​$700 ​, 3 prizes of ​$300 ​, 5 prizes of ​$50 ​, and 20 prizes of​ $5. What is the expected value of this raffle if you buy 1​ ticket?

Answer 1

Answer:-

Given that:-

Five thousand tickets are sold at​ $1 each for a charity raffle. Tickets are to be drawn at random and monetary prizes awarded as​ follows: 1 prize of ​$700 ​, 3 prizes of ​$300 ​, 5 prizes of ​$50 ​, and 20 prizes of​ $5.

What is the expected value of this raffle if you buy 1​ ticket?

Probability of winning a $700 prize=1/7000

Similarly ,probability of winning $300,$50 prizes are (3/7000),(5/7000) and (50/7000) respectively.

Hence, value of raffle =

=-0.7$

The expected value of this raffle if you buy 1​ ticket is -0.7