As part of a promotional scheme, the manufacturer of a new breakfast food offers
ID: 3206744 • Letter: A
Question
As part of a promotional scheme, the manufacturer of a new breakfast food offers a prize of $100,000 to someone willing to try the new product (distributed without charge) and send in his or her name on the label. The winner is to be drawn at random from all the entries received. If 300,000 people enter the contest, what are the expected winnings per entrant?
****All parameters must be calculated from scratch using the appropriate probability distribution. Do not use short-cut formulas such as the ones for the mean and variance of a binomial distribution. For some problems you may need to construct the probability distribution before you can calculate parameters. All probabilities must be calculated from first principles, as in the first homework assignment. DO NOT use short-cut formulas, such as the binomial equation.
Explanation / Answer
Total prize money is $100,000 and total entrants are 300,000
Therefore each person gets 100000/300000 = 0.3333
Which is the expected value
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