Sorry, Full question: In a lottery, a ticket costs $3, and the jackpot is worth $250000. In all, 100000 tickets are sold, one ticket is randomly drawn, and the winner is awarded the jackpot. What are the expected winnings in dollars of buying one ticket (including the cost of the ticket)?
Can anyone help with this expected value problem? Thanks so much!! :D
Can anyone help with this expected value problem? Thanks so much!! :D
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The probability of winning on the ticket is 1/100,000. So, the expected return (without cost) is $250,000/100,000 = $2.5. Hence expected winnings = $2.5 - $3 = - $0.5