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31 March, 18:06

You buy a lottery ticket to a lottery that costs $10 per ticket. There are only 100 tickets available to be sold in this lottery. In this lottery there are one $460 prize, two $80 prizes, and four $20 prizes. Find your expected gain or loss.

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  1. 31 March, 20:57
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    Expected Loss will be $3

    Explanation:

    Expected Loss can be calculated by multiplying the probabilities to Net expected outcome.

    Probabilities

    Prize ($460) = 1 / 100

    Prize ($80) = 2 / 100

    Prize ($20) = 4 / 100

    No prize = 100/100 - (1+2+4) / 100 = 93/100

    Expected value = [ (460 - 10) x 1/100 ] + [ (80 - 10) x 2/100 ] + [ (20 - 10) x 4/100 ] + [ (0 - 10) x 93/100] = 4.5 + 1.4 + 0.4 - 9.3 = - $3
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Home » Business » You buy a lottery ticket to a lottery that costs $10 per ticket. There are only 100 tickets available to be sold in this lottery. In this lottery there are one $460 prize, two $80 prizes, and four $20 prizes. Find your expected gain or loss.
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