Single choice10)What is the fair price of a lottery ticket that pays off $1,000 with a probability of 10% or zero with a probability of 90%?$100$900$500
Question
Solution 1
The fair price of a lottery ticket can be calculated using the expected value formula. The expected value is the sum of all possible outcomes, each outcome multiplied by its probability.
In this case, there are two possible outcomes:
- Winning $1,000 with a probability of 10% (0.10)
- Winning Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study prob
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solv
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