You buy a lottery ticket to a lottery that costs $10 per ticket. There are only 100 tickets available to be sold in this lottery. In this lottery there are one $460 prize, two $80 prizes, and four $20 prizes. Find your expected gain or loss.

Expected Loss will be $3

Explanation:

Expected Loss can be calculated by multiplying the probabilities to Net expected outcome.

Probabilities

Prize ($460) = 1 / 100

Prize ($80) = 2 / 100

Prize ($20) = 4 / 100

No prize = 100/100 - (1+2+4) / 100 = 93/100

Expected value = [ (460 - 10) x 1/100 ] + [ (80 - 10) x 2/100 ] + [ (20 - 10) x 4/100 ] + [ (0 - 10) x 93/100] = 4.5 + 1.4 + 0.4 - 9.3 = - $3