Question

In a raffle where 6000 tickets are sold for $2 each, one prize of $2600 will be awarded. What is the expected value of a single ticket in the raffle?

Answer 1

The expeted value of a single ticket is the sum of the value of all probabilities. In this case the probability of winning is:

$\frac{1}{6000}$

The gain if you win is $2598.

The probability of lossing is:

$\frac{5999}{6000}$

the loss if you lose is $2

The expected value of a single tiket is:

$2598\cdot\frac{1}{6000}+(-2)\cdot\frac{5999}{6000}$$\frac{2598-11998}{6000}$

$-1.566666$