Question

Two hundred raffle tickets ae sold for $3 each. One prize of $100 is awarded. Raul purchased 1 ticket. Determine his expected value and the fair price for the ticket.

Answer 1

think of it this way
imagine he buys all the tickets,
he spends 600 dollars
gets back 100 dollars for a net loss of 500 dollars
averaged over the total number of tickets the expected value is
\[-\frac{500}{200}=-\frac{5}{2}=-2,5\]

Answer 2

Ok got it....thanks. I would have never guessed it.

Answer 3

yw

Answer 4

How do I give you a badge?

Answer 5

you can click "best response" on the right if you like

Answer 6

There you go....thanks again.

Answer 7

Still there? I still have to find the fair price for the ticket.

Answer 8

Ok thanks

Answer 9

okay that was WRONG

Answer 10

lol

Answer 11

there are 200 tickets, not 300

Answer 12

so a fair price would be \(\frac{100}{200}=\frac{1}{2}\) or fifty cents

Answer 13

Cool, you're the best....

Answer 14

then you would raise exactly $100 and pay out $100 giving an expected value of zero
there is a probability way to do this as well, but it is somewhat more complicated, this is simplest

Answer 15

I'll take the simple way lol

Answer 16

yeah, simple is best

Answer 17

Ok thanks.