Question

One thousand tickets are sold at $4 each. One ticket will be randomly selected and the winner will receive a color television valued at $374. What is the expected value for a person that buys one

A) -$1.00
B) -$3.62
C) $3.62
D) $1.00

Answer 1

The expected value for a person that buys one ticket is $0.374, so the correct answer is C) $3.62.

Step-by-step explanation:

The expected value for a person that buys one ticket can be calculated by multiplying each possible outcome by its probability and summing them up. In this case, there are two possible outcomes: winning the television ($374) with probability 1/1000 and not winning the television (0) with probability 999/1000.

The expected value is calculated as follows:

Expected value = (374 * 1/1000) + (0 * 999/1000) = $0.374

Therefore, the correct answer is C) $3.62, as it is the closest option to the calculated expected value.