Question

Out of 250 tickets in a raffle, one ticket will win a $980 prize, one ticket will win a $680 prize, and one ticket will win a $470 prize. The other tickets will win nothing. If you have a ticket, what is the expected payoff?

Answer 1

The expected value is given as:

`E(x)=\sum ^{}_{}xP(x)`

then in this case we have:

`\begin{gathered} E(x)=980((1)/(250))+680((1)/(250))+470((1)/(250)) \\ =8.52 \end{gathered}`

therefore the expected payoff is $8.52