Question

In a​ state's Pick 3 lottery​ game, you pay ​$1.45 to select a sequence of three digits​ (from 0 to​ 9), such as 455. If you select the same sequence of three digits that are​ drawn, you win and collect ​$362.16. Complete parts​ (a) through​ (e).

Answer 1

ANSWER

a)

Each of the 3 digits can be any amongst 0 to 9 i.e. any of these 10 digits.

So, the total number of different selections possible = (10)(10)(10) = 1000

b)

Since only one sequence can be the winning sequence, so

P(winning) = 1/1000 = 0.001

c)

Net profit = 362.16- 1.45 = $360.71

d)

Expected value = 362.16(0.001) + (-1.45 )(1-0.001)

=0.36216-1.44855

= -1.08639~ -1.09

e)

Since the expected value in both games is equal,

so, neither game is better.

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