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The prize in a raffle is a flat-screen TV valued at $350, and 1,000 tickets are sold for a dollar each. Let’s find the expected value if you buy 1 ticket. Find the expected value. Round your answer to two decimal places. Remember a gain would be posit

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Answer:

the expected value EV = −$0.65

Step-by-step explanation:

Expected value EV = expected gain - expected loss

Given;

Cost of a ticket L = $1

Probability of losing the ticket P(L)= 999/1000 = 0.999

Cost of a flat screen TV = $350

Expected gain G = $350 - $1 = $349

Probability of winning the TV P(G) = 1/1000 = 0.001

EV = G × P(G) - L × P(L)

Substituting the values;

EV = $349 × 0.001 - $1 × 0.999

EV = −$0.65

the expected value EV = −$0.65

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