Question

Suppose you buy 1 ticket for​ $1 out of a lottery of 1000 tickets where the prize for the one winning ticket is to be ​$1000. what is your expected​ value?

Answer 1

The expected value of buying a $1 ticket out of a lottery of 1000 tickets where the prize for the one winning ticket is $1000 is approximately -$0.999. This means that, on average, you can expect to lose about $0.999 for each ticket you buy.

Step-by-step explanation:

To calculate the expected value, we need to multiply each possible outcome by its probability and then sum them up. In this case, the possible outcomes are winning $1000 with probability 1/1000 and losing $1 with probability 999/1000. So, the expected value is: ($1000 × 1/1000) + (-$1 × 999/1000) = -$0.999

Therefore, the expected value is approximately -$0.999. This means that, on average, you can expect to lose about $0.999 for each ticket you buy.

Answer 2

The answer is 1,000,000 because if you multiply 1,000 and 1,000 you will get 1,000,000