Find the expected value of the Fund\'s application of the \"cover all of the num

Question

Find the expected value of the Fund's application of the "cover all of the numbers" strategy from the newspaper article on Assume that $5 million was spent on lottery the half of the $13 million raised went for management expenses, and that the balance was never spent. so assume that Virginia honors the winning ticket. One application of the "cover all the numbers" strategy would be to bet $1 on every single number in roulette. Find the results of this strategy. How could you use the expected value of the $1 single-number bet (-$2/38) to answer part (a)? The application of the "cover all the numbers" strategy to a modern state lottery would involve the purchase of a large number of tickets. How many tickets would have to be purchased if you were in a state that has a 6/49 lottery (the player

Explanation / Answer

44)

a)since there are 38 numbers on wheel

we will bet total of $38

since we will win for sure we will get back $35+$1 i.e $36 and we are paying $38

so we are losing $2 everytime

b)

Expected value of single number bet = (1/38)*(35)+(37/38)(-1) = (-2/38)

since expecetd value on all numbers is (-$2/38)

expected value of betting on all numbers is 38*(-$2/38) i.e -$2

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