Question

Suppose 10,000 tickets are sold in a lottery each for Rs 1. First prize is of Rs 3000 and the second prize is of Rs. 2000. There are three third prizes of Rs. 500 each. If you buy one ticket, what is your expectation.

Answer 1

Let X be the random variable where X = 0, 500, 2000 and 3000

X	0	500	2000	3000
P(X)	`9995/10000`	`3/10000`	`1/10000`	`1/10000`

E(X) = `9995/10000 + 500 xx 3/10000 + 2000 xx 1/10000 + 3000 xx 1/10000`

= `0 + 1500/10000 + 2000/10000 + 3000/10000`

= `6500/1000`

= `13/20`

= ₹ 0.65