The following notice appeared in the golf shop at a Myrtle Beach, South Carolina
ID: 3224670 • Letter: T
Question
The following notice appeared in the golf shop at a Myrtle Beach, South Carolina, golf course. Take into account the price of the ticket. John Underpar buys a ticket. a. What are Mr. Underpar's possible monetary outcomes? Either wins the driver (worth $295) or has a worthless ticket (worth -$5) Either wins the driver (worth $300) or has a worthless ticket (worth $0) c. Summarize Mr. Underpar's "experiment" as a probability distribution. d. What is the mean or expected value of the probability distribution? e. If all 80 tickets are sold, what is the expected return to the Club?Explanation / Answer
a) Clearly here Mr Underpar can lose the raffle in which case it loses $5 that is worth -$5 and in case he wins the raffle, he gets $300 - $5 = $295 ( deducting the cost of ticket )
Therefore the first option is the correct answer here.
b) P ( Getting nothing ) = 79/80 = 0.9875
P( winning the driver ) = 1/80 = 0.0125
This is the required probability distribution for the raffle.
c) Mean or expected value of the probability distribution here would be:
Winning amount * Probability of winning the driver + Amount when he wins nothing * Probability of getting nothing
= 295*0.0125 - 5* 0.9875 = 3.6875 - 4.9375 = -1.25
Therefore the expected value is -1.25
d) If 80 tickets are sold expected return to the club would be
= 80* ( - expected value of the probability distribution )
= 80*1.25 = $100
Therefore the expected return to the club would be $100
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.