Question

1)

a)

A lottery sells 20,000 tickets at $2 each. There are:

-1 prize of $10,000

-10 prizes of $50

-100 prizes of $2

What is the expected value of this lottery? Explain your answer

b)

A bingo ball contains 75 tokens numbered from 1 to 75. The game host draws a token randomly from the ball but simply says that the number has no repeating digits. What is the probability that the number drawn was even? Explain your answer.

Answer 1

Answer:

1.

Expected value of lottery = Expected payout - ticket cost

substitute values

= (1/20000)*10000 + (10/20000)*50 + (10/20000)*2 - 2

= - 1.465

i.e.,

Here there is $1.465 loss on each bet.

2.

Given,

A bingo ball contains 75 tokens numbered from 1 to 75. The game host draws a token randomly from the ball but simply says that the number has no repeating digits.

here 11,22,33,44,55,66 are the repeating digits , so we remove thosei.e., 75 - 6 = 69

Now the probability that the number drawn was even = 34/69

= 0.4928