Discrete Random Variable question (raffle)

[Guest]

A raffle is to be drawn from 500 tickets. Each ticket was purchased for $1 with first prize being $200, second prize $150 and third prize $100. Find:

a. the expected loss per ticket
b. the profit made by organisers, that is,the house
c. the house percentage

thanks in advance

 

[galactus]

To find the gain or loss for each prize, subtract the proce of the ticket from the prize.

Your gain on the $200 prize is 200-1=199, and so forth.

Gains(x): 199, 149, 99 ,-1
P(x): 1/500, 1/500, 1/500, 497/500

\(\displaystyle \L\\E(x)=\sum{xP(x)}\)

The expected value will be negative, therefore, a loss.