Question

At a raffle, 50 tickets are sold at $2 each for 3 prizes of $100, $50, and $10. you buy 1 ticket. what is the expected value of your gain?

Answer 1

The expected value of your gain in this raffle is $2.10.

Step-by-step explanation:

To calculate the expected value of your gain, we need to multiply the probability of winning each prize by the value of that prize, and then sum these values.

In this case, there are 50 tickets sold for 3 prizes: $100, $50, and $10. So the probability of winning the $100 prize is 1/50, the probability of winning the $50 prize is 1/50, and the probability of winning the $10 prize is 1/50.

Now, we can calculate the expected value: ($100 x 1/50) + ($50 x 1/50) + ($10 x 1/50) = $2.10

Therefore, the expected value of your gain is $2.10.