1. The odds of winning the Mega Millions lottery jackpot are 1 in 250 million. A Mega Millions lottery ticket always costs $1. Assume that there are only two outcomes for the Mega Millions lottery: win the jackpot (and don't split it with any other winners), or lose and receive no payout. (a) Is a lottery ticket a financial asset? Why or why not? (1 point) (b) If the Mega Millions jackpot is currently $350 million, calculate the expected return on a $1 ticket, using the arithmetic average method. Show your work. (Hint for (b) and (c): treat the lottery odds as though they're the distribution of historical returns.) (1 point) (c) Next, estimate the volatility of the Mega Millions ticket, assuming that the outcomes are normally distributed. Show your work. (2 points) ((1) Najar is a riskneutral investor: he will always take a fair gamble. What would the minimum value of the Mega Millions jackpot have to be in order for Najar to buy a ticket for $1? Show your work. (1 point) (e) Andy is a risk-averse investor with the utility function u [w :|=w'g . If the Mega Millions jackpot is currently $500 million, would Andy buy a ticket for $1? Why or why not? Show your work. (2 points)