Help probability questions?

Question

Suppose the payoff of a $1 ticket in a tri-state lottery game is $500 with a probability of .0005 and $0 the rest of the time. Let X be the random variable that represents a payoff. What is the payoff of x, on average?

Answer 1

Expected payoff = $500 x 0.0005 + $0 x 0.9995

Your $1 ticket is expected to payoff 0.25 or 25 cents, on the average. Much better to invest that $1 on something that has an expected positive return, than buy a lottery ticket.

Answer 2

yea what he said up there ^^^^^^^^^^^