A raffle offers one 800000 prize one 400000 prize and five 1

A raffle offers one $8000.00 prize, one $4000.00 prize, and five $1600.00 prizes. There are 5000 tickets sold at $5 each. Find the expectation if a person buys one ticket. (Answer: -$1.00).

Solution

Expectation = 8000*(1/5000) + 4000*(1/5000) + 1600*(5/5000) = 4 $

But price is 5 $

Hence expectaction = 4 - 5 = - 1 $