SAMSUNG ald, Rabiatu [27] Math 111 MAB Test 2 Spring 201e vedueeday March 7, 201

Question

SAMSUNG ald, Rabiatu [27] Math 111 MAB Test 2 Spring 201e vedueeday March 7, 2018 at 400PM. If youm e graded. March 9, 4.00 n will for sctatch work. teating in the textbook Number each of the steps from page You mang oft th 5 Slaple ce Excel ueks pecified Q45 Expected Value Notes and pages 201-206 A charitable organization is selling raffle tickets for $4 The first prize is a HD television valued at $2280 of cookware v or loss)? Exprss $4 The each valued at $30 . Suppose 3250 tickets were solkd, edlars and cents of your net gain (or loss)? Express were sold, and you bought 1 ticket, what is the expected value thal places) 12 pointsyour swer in dollars and cents rounded to the nearest penny. (.e 2 he remaining prizes are 30 third prize gift certificates in

Explanation / Answer

Let X = profit (it'll be negative if there is a loss)

Expected profit/loss = E(X) = -$4 + E(Prize money)

Now, E(prize value) = P(1st prize) * $2280 + P(2nd Prize) * $1060 + P(3rd Prize) * $30

P(1st prize) = 1/3250

P(2nd prize) = 1/3250

P(3rd prize) = 30/3250

E(prize value) = $2280/3250 + $1060/3250 + $30*(30/3250)

= $1.31

Expected profit = E(X) = -$4 + $1.31 = -$2.69

Therefore, expected value of net loss (as it is negative) is $2.69

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