Question

1000 tickets for prizes are sold for 42 each. Seven prizes will be awarded-one for $400, one for $200, and five for 450. steven purchases one of the tickets. find the expected value and find the fair price of the ticket.

Answer 1

The expected value of one ticket is the total prize money divided by 1000. That is just $5.25. The price Steve paid is much too high. Whatever is a "fair" price is a matter of opinion, or how charitable the ticket buyer wants to be.