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:

1. Winning $1,000 with a probability of 10% (0.10)
2. Winning $0 with a probability of 90% (0.90)

So, the expected value (fair price) of the lottery ticket would be:

(1,000 * 0.10) + (0 * 0.90) = $100

Therefore, the fair price of the lottery ticket is $100.

Question

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:

1. Winning $1,000 with a probability of 10% (0.10)
2. Winning $0 with a probability of 90% (0.90)

So, the expected value (fair price) of the lottery ticket would be:

(1,000 * 0.10) + (0 * 0.90) = $100

Therefore, the fair price of the lottery ticket is $100.

Knowee AI · Accepted Answer

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:

1. Winning $1,000 with a probability of 10% (0.10)
2. Winning $0 with a probability of 90% (0.90)

So, the expected value (fair price) of the lottery ticket would be:

(1,000 * 0.10) + (0 * 0.90) = $100

Therefore, the fair price of the lottery ticket is $100.

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

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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%?

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