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simple probability exercise
This one might be a little fun for the guys that are more of beginners in probability theory:
All numbers can be found at the "instant games" section of wilottery.com. For a current scratch-off game, the wisconsin lottery gives the following odds of winning: $1 1:10 $2 1:10 $10 1:55 $25 1:400 $50 1:400 $100 1:89,143 Grand prize 1:520,000 Question 1: If the Expected return on a $1 ticket is 67.42 cents (or an E.V. of -32.58 cents, if you prefer), what is the payout for the grand prize? Question 2: The site gives the odds of "winning" (payout greater than zero) as approximately 1:4.5. What are the odds of returning a profit on a $1 ticket? Question 3: What is the expected return on a ticket, given that you know it's a "winner" (payout greater than zero)? Hint: you'll need to solve question 1 first. solutions later. |
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