At a raffle, 500 tickets are sold at $5 each for the prizes of $500. $250. $150.

Question

At a raffle, 500 tickets are sold at $5 each for the prizes of $500. $250. $150. and $75. Suppose, there is only one $500 prize, two $250 prizes, three $150 prizes, and four $75 prizes are available. Assuming you buy one ticket and taking random variable X as the value of your gain, answer the following. a. What are the possible values for X? b. Construct the probability distribution (values of X and their probabilities) of the random variable X in tabular form. c. Calculate the expected value of your gain.

Explanation / Answer

a. possible values of X:

b. probability distribution of X:

c. Expected gain E(X) = -1.5

Excel formula:

X ($ gain) 495 245 145 70 -5

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