A cash prize of $5000 is to be awarded at a fundraiser. If 2,500 tickets are sold at $5 each, find the expected value if a person purchases just one ticket.
3 answers
If you buy one ticket you have a 1/2500 chance of winning. Thus, you're expected value is 5000/25$ = 2$ return for your 5$ ticket. So you get -$3.
wow, it seems to me it is wrong.
It is Correct. Sorry I said it seemed wrong.
2 answers