Problema Solution
One thousand raffle tickets are sold for $5.00 each. One grand prize of $1000 and two consolation prizes of $100 each will be awarded. Jeremy purchases one ticket. Find his expected value.
Answer provided by our tutors
EV = sum(x*p(x))
= -5 + 1000*1/1000 + 100*2/1000
= -$3.80
The expected value is -3.80.