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chegg 72. you buy a lottery ticket to a lottery that costs $10 per ticket. there are only 100 tickets available to be sold in this lottery. in this lottery there are one $500 prize, two $100 prizes, and four $25 prizes. find your expected gain or loss, using a constructed pdf and the expected value equation.

Sagot :

tutorconsortium104

The expected gain or loss exists estimated by (P(x) × n) then there exists a loss of $2.

What is meant by expected value?

When determining the mean of a probability distribution, we use expected value. The average value we anticipate to see prior to any data collection is represented by this. When attempting to determine the average value of a given sample, the mean is frequently utilized.

The probability of the 4 prizes which exists $500, $100, $25, and no prize.

P ($500 prize) = 1/100 or 0.01

P ($100 prize) = 2/100 or 0.02

P ($25 prize) = 4/100 or 0.04

P (No prize) = 100/100 – 1 + 2 + 4/100 = 93/100 = 0.93

Expected gain or loss exists estimated by: (P(x) × n)

substitute the values in the above equation, we get

E = (500-10) × 0.01 + (100-10) × 0.02 + (25-10) × 0.04 + (-10) × 0.93

simplifying the equation, we get

= 4.90 + 1.80 + 0.6 – 9.3

E = -2

There exists a loss of $2.

To learn more about expected value refer to:

brainly.com/question/24305645

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