UNDERSTANDING BASIC STATISTICS (LOOSE)
UNDERSTANDING BASIC STATISTICS (LOOSE)
8th Edition
ISBN: 9781337558198
Author: BRASE
Publisher: CENGAGE L
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Chapter 6.1, Problem 8P

Basic Computation: Expected Value For a fundraiser, 1000 raffle 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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Chapter 6 Solutions

UNDERSTANDING BASIC STATISTICS (LOOSE)

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