QuestionWhat does an expected value of \$ 500 from buying five game tickets mean? a. 1 in 5 chance of winning b. 0.20 probability of winning \$ 500 c. Win \$ 500 from at least one ticket d. Average winnings from five tickets is \$ 500
Studdy Solution
STEP 1
Assumptions1. The expected value from winning a prize when you buy five game tickets this month is $500. The expected value is calculated as the sum of the possible outcomes multiplied by their respective probabilities3. The possible outcomes and their probabilities are not explicitly given in the problem
STEP 2
The expected value of a random variable is a weighted average of all possible values that this random variable can take on. The weights are the probabilities of these outcomes.
STEP 3
In this problem, the expected value of winning a prize when you buy five game tickets is given as 500 each time.
STEP 4
This does not mean that every time you buy five game tickets, you will win 500.
STEP 5
The correct interpretation of the expected value in this context is that on average, your winnings from buying five game tickets is $500. This is option (d).
The solution is On average, your winnings from buying five game tickets is $500.
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