For a multistate lottery, the following probability (cash prize. S PX) 000000000

Question

For a multistate lottery, the following probability (cash prize. S PX) 000000000833 distribution represents the cash prizes of the lottery Grand prize with their corresponding probabilities. 000000021 200,000 0.000001549 10,000 100 0.000170286 0.005005137 (a) If the grand prize is $14,000,000, find and interpret the expected cash prize If a ticket costs $1, what is your expected profit from one ticket? The expected cash prize is s (Round to the nearest cent as needed) What is the correct interpretation of the expected cash prize? Click to select your answer(s).

Explanation / Answer

Expected cash prize can be found out by multiplying prize by probabilities and summing them. It is found out to be 0.30

Correct interpretation is that on an average, you will win 0.30 per ticket

Expected profit = Average prize per ticket - Cost = 0.30-1 =0.70

Increase in grand prize amount should be such that Extar grand prize*Probability =0.70

Or increase = 0.70/0.0000000083 = 84Miliion

Hence grand prize should be 14+84=98 million

C- No, because the chance of winning is determined by the properties of the lottery. Hence, answer is B

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