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Suppose you buy a raffle ticket in each of 25 consecutive weeks in support of your favorite charity. one of the 1200 raffle tickets sold each week pays $2000. what do you expect to win for those 25 weeks, and with what standard deviation?

Respuesta :

shinmin
a. Let x be the cost of 1 raffle ticket 
then -x (1199/1200) + (2000-x) (1/1200) = 0 
-1199x/1200 + 2000 / 1200 - x/1200 = 0 -1200x / 1200 =- 2000/1200 x= $1.67 
So your expected value per game is 
-1.67(1199/1200)+1998.33(1/1200)=0 

b. Since your random variable takes on only 2 values, 
which is just the square of the standard deviation 
(1998.33-1.67)^2(1/1200)(1199/1200) = 3319.44
Therefore, the answer is win about $0, give or take about $58.

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