Answer:
His expected value is -2
Step-by-step explanation:
Five hundred raffle tickets are sold for $3 each
One prize of $500 is awarded.
Expected value = [tex]xP(x)[/tex]
Probability of winning = [tex]\frac{1}{500}[/tex]
If won the price he gets = 500
But he also paid $3 to buy ticket
So, the actual price he got = 500-3= 497
Probability of not winning = [tex]\frac{499}{500}[/tex]
So, Expected value= [tex]\frac{1}{500}(497)+\frac{499}{500}(-3)[/tex]
= [tex]-2[/tex]
Hence his expected value is -2
