One thousand raffle tickets are sold at $1 each. Three tickets will be drawn at random (without replacement), and each will pay $200 . Suppose you buy 5 tickets. (A) Create a payoff table for 0 , 1 , 2 , and 3 winning tickets among the 5 tickets you purchased. (If you do not have any winning tickets, you lose $5 ; if you have 1 winning ticket, you net $ 195 since your initial $5 will not be returned to you; and so on.) (B) What is the expected value of the raffle to you?
One thousand raffle tickets are sold at $1 each. Three tickets will be drawn at random (without replacement), and each will pay $200 . Suppose you buy 5 tickets. (A) Create a payoff table for 0 , 1 , 2 , and 3 winning tickets among the 5 tickets you purchased. (If you do not have any winning tickets, you lose $5 ; if you have 1 winning ticket, you net $ 195 since your initial $5 will not be returned to you; and so on.) (B) What is the expected value of the raffle to you?
Solution Summary: The author calculates the payoff table for 0,1,2, and 3 winning tickets among the 5 tickets bought from the one thousand raffle tickets sold at 1 each.
One thousand raffle tickets are sold at
$1
each. Three tickets will be drawn at random (without replacement), and each will pay
$200
. Suppose you buy
5
tickets.
(A) Create a payoff table for
0
,
1
,
2
,
and
3
winning tickets among the
5
tickets you purchased. (If you do not have any winning tickets, you lose
$5
; if you have 1 winning ticket, you net
$
195
since your initial
$5
will not be returned to you; and so on.)
(B) What is the expected value of the raffle to you?
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