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Please help! Correct answer only! I need to finish this assignment before tomorrow.

In a raffle, one ticket out of 500 will win a $390 prize, three tickets will win a $230 prize, and sixteen tickets will win a $170 prize. The remaining tickets will win nothing. If you have a ticket, what is the expected payoff?

User Nickohrn
by
5.1k points

1 Answer

4 votes

Answer: $7.60

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Work Shown:

1/500 = 0.002 is the probability of winning $390

3/500 = 0.006 is the probability of winning $230

16/500 = 0.032 is the probability of winning $170

Multiply the probabilities with their respective winnings

0.002*390 = 0.78

0.006*230 = 1.38

0.032*170 = 5.44

Then add up those results

0.78+1.38+5.44 = 7.60

which is the expected value.

Side note: This game is not a fair game because mathematically a "fair game" is defined as such where the expected value is 0; ie, neither the player nor the dealer win and things break even.

User WebArtisan
by
5.8k points
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