One state lottery has 1100 prizes of $1, 150 prizes of $10, 25 prizes of $70, 5
ID: 3276275 • Letter: O
Question
One state lottery has 1100 prizes of $1, 150 prizes of $10, 25 prizes of $70, 5 prizes of $285, 2 prizes of $1030, and 1 prize of $2300. Assume that 32000 lottery tickets are issued and sold for $1.
What is the lottery's expected profit per ticket? ( the answer is 0.6833, Im just not sure how to get there)
What is the lottery's expected profit per ticket? ( the answer is 0.6833, Im just not sure how to get there)
What is the lottery's standard deviation of profit per ticket? (the answer is 15.7652 Im just not sure how to get there)Explanation / Answer
Ans:
The lottery makes 32000 on sales
It pays out:
$1*1100=$1100
$10*150=$1500
$70*25=$1750
285*5=$1425
$1030*2=$2060
$2300*1=$2300
Total is $10,135
The fraction paid out is 10,135/32,000=0.3167
so their expected profit per $1 is 1-0.3167=0.6833
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