At a raffle, 1500 tickets are sold for $2 each for four prizes of $500, $250, $150, and $75. You buy one ticket. What is the expected value of your gain?

Question

Beckett

Mathematics

26 July, 04:31

At a raffle, 1500 tickets are sold for $2 each for four prizes of $500, $250, $150, and $75. You buy one ticket. What is the expected value of your gain?

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Answers (1)

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Romeo Gallagher · Answer 1

To find the expected value of your gain in each prize, subtract the price of the ticket from the prize:

If the prize is $500: $500 - $2 = $498

If the prize is $250: $250 - $2 = 248

If the prize is $160: $160 - $2 = $73

But if you did not win any cash prize, you do not have any gain because

0 cash prize - $2 ticket = - $2 which is a loss