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Thread: There were 400 000 tickets sold for a lottery, and each ticket cost $1....

  1. #1

    Exclamation There were 400 000 tickets sold for a lottery, and each ticket cost $1....

    hi!! my finals are tomorrow and i don't have a clue how to do this question, and google and khan academy couldnt help me. here is the question:

    There were 400 000 tickets sold for a lottery, and each ticket cost $1. There were four prize categories, and the number of winning tickets for each category is shown below. If Alfred purchased one ticket, what is his expected gain/loss?

    prize money number of tickets
    $40 000 1
    $4 000 5
    $400 120
    $5 4000

    the answer key says the answer to this question (alfred's gain/loss) is -0.68.
    if anyone can solve this and show me the steps how, it would be greatly appreciated thanks !!!

  2. #2
    Junior Member
    Join Date
    Jan 2018
    Location
    Boston
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    You need to use the formula for the expected value (or mathematical expectation). Look up "expected value lottery" on youtube. E.g. https://www.youtube.com/watch?v=vueXEAwNn6c.

  3. #3
    Junior Member
    Join Date
    Jan 2018
    Location
    Toronto
    Posts
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    Once you've followed lev888's advice and figured out what an expectation value is, you're going to need to figure out the probability of winning each prize, in order to compute that expectation value.

    Hint: If 400,000 tickets exist in total, and only one of them is a winning ticket for the grand prize ($40k), then what is the probability of winning the grand prize?

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