Question

A state has a lottery game where a person picks one of the 1000 three-digit numbers between 000 and 999. The lottery selects a three-digit number at random. With a bet of $1, a person wins $700 if their number is selected and nothing ($0) otherwise. The expected value of the probability distribution for the amount of money you will win is 0.70. What is the correct interpretation of the expected value

Answer 1

A player can expect to win an average of 0.70 per lottery after playing the lottery sufficiently many times.

Explanation:

The expected value for the amount of money to be won is 0.70 ;

The expected value of expected mean simply means the long run average because the expected mean refers to the average value of a random variable which is which is obtained over a large number of trials or experiment. In the case of lottery game, expected will thus be interpreted to mean the average winning (or loss) expected which a player earns or incurs after playing the lottery many times. It differs from the mean or average value earned after playing just a game or two as it refers to a long run average.