Basic Computation: Expected Value For a fundraiser, 1000 raffl e tickets are sold, and the winner is
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Basic Computation: Expected Value For a fundraiser, 1000 raffl e tickets are sold, and the winner is chosen at random. There is only one prize, $500 in cash. You buy one ticket.
(a) What is the probability you will win the prize of $500?
(b) Your expected earnings can be found by multiplying the value of the prize by the probability you will win the prize. What are your expected earnings?
(c) Interpretation If a ticket costs $2, what is the difference between your
“costs” and “expected earnings”? How much are you effectively contributing to the fundraiser?
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Related Book For
Understanding Basic Statistics
ISBN: 9781305548893
7th Edition
Authors: Charles Henry Brase, Corrinne Pellillo Brase
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