Lottery: I buy one of 250 raffle tickets for $10. The sponsors then randomly sel
ID: 3061217 • Letter: L
Question
Lottery: I buy one of 250 raffle tickets for $10. The sponsors then randomly select 1 grand prize worth $300, 2 second prizes worth $100 each, and 3 third prizes worth $40each. Below is the discrete probability distribution for this raffle.
(a) Recognizing that I spent $10 to buy a ticket, determine the expected value of this raffle to me as a player. Round your answer to the nearest penny.
$
(b) What is an accurate interpretation of this value?
It represents how much you would win every time you play the game.It represents the per-game average you would win/lose if you were to play this game many many times.
It represents how much you would lose every time you play the game.It is meaningless because you can't actually win or lose this amount.
(c) Based on your answers, would this raffle be a good financial investment for you and why? There is only one correct answer and reason.
Yes, because the expected value is positive.
Yes, because the expected value is negative.
No, because the expected value is positive.
No, because the expected value is negative.
Prize P(x) Grand 1/250 Second 2/250 Third 3/250 None 244/250Explanation / Answer
(a) Here grand prize = $ 300
Second prizes = $ 100
Third prizes = $ 40
so if x is the win prize
E(x) = 1/250 * (300 -10) + 2/250 * (100 -10) + 3/250 * (40 -10) + 244/250 * (0 -10) = -$ 7.52
(b) Here option A is correct. The accurate interpretation is "
It represents how much you would win every time you play the game.It represents the per-game average you would win/lose if you were to play this game many many times."
(c) Here This raffle be a good financial investment is not good because the expected value is negative. Option D is correct.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.