In a raffle, one ticket will win a $100 prize, and the remaining tickets will win nothing. There are 50 in the raffle. If you have a ticket, what is the expected payoff?$____
Q. In a raffle, one ticket will win a $100 prize, and the remaining tickets will win nothing. There are 50 in the raffle. If you have a ticket, what is the expected payoff?$____
Calculate probability of winning: Calculate the probability of winning the $100 prize.Probability of winning = Number of winning tickets / Total number of ticketsProbability of winning = 501
Calculate probability of winning nothing: Calculate the probability of winning nothing. Probability of winning nothing = Number of losing tickets / Total number of tickets Probability of winning nothing = 5049
Calculate expected payoff for winning: Calculate the expected payoff for winning the $100 prize.Expected payoff for winning = Probability of winning ∗ Amount wonExpected payoff for winning = 501∗$100Expected payoff for winning = $2
Calculate expected payoff for losing: Calculate the expected payoff for winning nothing.Expected payoff for losing = Probability of winning nothing × Amount won for losingExpected payoff for losing = 5049×$0Expected payoff for losing = $0
Add expected payoffs to find total: Add the expected payoffs to find the total expected payoff.Total expected payoff = Expected payoff for winning + Expected payoff for losingTotal expected payoff = $2 + $0Total expected payoff = $2
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