You buy 1 ticket for $1 out of a lottery of 1000 tickets where the prize for the one winning ticket is to be $

Question

You buy 1 ticket for $1 out of a lottery of 1000 tickets where the prize for the one winning ticket is to be $500. What are your expected winnings?

a. -$.40
b. $0
c. -$1.00
d. -$.50

Answer 1

Answer is d.

Only one ticket has value 500-1=499

rest 999 ticket have value -1

for 1000 tickets value per ticket = 499-999/1000 = -500/1000

=-$.50 Answer

Answer 2

C. you're expected to lose the $1. NOT expected to win the $500. chances are 1:1000. Chances are 1:1 that you'll lose the $1.

Answer 3

I figured the answer to be +$.50

(500 - 1) = $499 what I would get if I won
499 x (1 / 1000) = .499 = $.50 what I should win theoretically

I hope I was helpful?
Good luck!

Answer 4

500 * 1/1000 - 999/1000 *1 = -0.499 so Answer d fits best.
The formula is winnings * number of tks purchased / total tkts - # of remaining tkts / # of tkts * amount bet.

Therefore one expects, on average, to lose over fifty cents for every dollar bet, and the expected value of a one dollar bet is $0.499.

In gambling or betting, a game or situation in which the expected value of the profit for the player is zero (no net gain nor loss) is commonly called a "fair game."

Answer 5

$500 - ($1 * 1,000) * 1/1,000
$500 - $1,000 * 1/1,000
- $500 * 1/1,000
- $0.50

The answer is d. - $0.50.

Answer 6

D