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Math Help - Probability Distributions! 2 Questions...

  1. #1
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    Probability Distributions! 2 Questions...

    1.) A raffle has a grand prize of a European cruise valued at $11500 with a second prize of a Rocky Point vacation valued at $1100. If each ticket costs $2 and 10000 tickets are sold, what are the expected winnings far a ticket buyer? Express to at least three decimal place accuracy in dollar form (as opposed to cents).

    2.) Consider the following game of chance based on the spinner below:
    Each spin costs $2. If the spinner lands on A the player wins $8, if the spinner stops on B the player wins a penny otherwise the player wins nothing. Calculate the players expected winnings. Express your answer to at least three decimal places in dollar form.
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  2. #2
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    By Laplace, the probability that you choose a specific ticket is: \frac{1}{n} with n being the total number of tickets. The expected value is therefore

    \frac{1}{n} \sum_{k=1}^n x_k where x_k is your payoff for a specific scenario. Thus, x_k = 0 for all scenarios but the first and second price. Your expected winnings are these expected payoffs minus the price per ticket of 2 dollars. Your result will, however only have two decimal digits (that differ from zero).

    For 2 there is, in my opinion, too little information given. If you again go by Laplace it would be 1/3 each event and you could again easily calculate the expected payoff by the forumla given above. This is what I would do since there is nothing else computable without any distribution function of the probability of these events.
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