At a Raffle, 1000 tickets are sold at $5 each. There are 20 prizes of $100, and 1 grand prize of $2000. Suppose you buy one ticket. Let the random Variable X represent your net gain (remember that the net gain should include the cost of the ticket) after playing the game once. Question: If you ply in such a raffle 100 times, what is the expected net gain?

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Asked Nov 25, 2019
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At a Raffle, 1000 tickets are sold at $5 each. There are 20 prizes of $100, and 1 grand prize of $2000. Suppose you buy one ticket. Let the random Variable represent your net gain (remember that the net gain should include the cost of the ticket) after playing the game once.

 

Question: If you ply in such a raffle 100 times, what is the expected net gain?

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Expert Answer

Step 1

Before calculating the expected net gain, the probability d...

|X Expected net gain
Р)
$95
$1995
-S5
20/1000 1/1000 979/1000
The expected net gain for playing a raffle is given below:
20
$1,995
979
1
-$5
1,000
$95
Expected net gain
1,000
1,000
- $95(0.02)+ $1,995 (0.001)- $5 (0.979)
$2$2-$5
=-S1
Thus, the expected net gain is -$1
If the raffle is played for 100 times, the expected net gain is -$1(100)-S100
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|X Expected net gain Р) $95 $1995 -S5 20/1000 1/1000 979/1000 The expected net gain for playing a raffle is given below: 20 $1,995 979 1 -$5 1,000 $95 Expected net gain 1,000 1,000 - $95(0.02)+ $1,995 (0.001)- $5 (0.979) $2$2-$5 =-S1 Thus, the expected net gain is -$1 If the raffle is played for 100 times, the expected net gain is -$1(100)-S100

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