Question
Wei buys a lottery ticket. The ticket has several ways to win. The table below shows the different ways to win, the probability of winning
Wei buys a lottery ticket. The ticket has several ways to win. The table below shows the different ways to win, the probability of winning each way, and how much money each win results in. Every time Wei buys a ticket, she can win money each way.
| Ways to Win | Probability | Winnings |
|---|---|---|
| Way 1 | 68% | $0 |
| Way 2 | 24% | $0 |
| Way 3 | 6% | $5 |
| Way 4 | 2% | $25 |
Given the probabilities and payout values in this table, what is the expected value of Wei's ticket?
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Personal Financial Planning
Authors: Lawrence J. Gitman, Michael D. Joehnk, Randy Billingsley
13th edition
1111971633, 978-1111971632
