A children's cancer center sells 150 raffle tickets to raise money. Tickets cost $100 each. One ticket will be drawn at random for the $8,000 prize: a new men's Rolex watch.
What is the expected net value of a raffle ticket?

Question

Quizplus · Accepted Answer

The expected net value of a raffle ticket is calculated as the probability of winning multiplied by the value of the prize minus the cost of the ticket. The probability of winning is 1/150, and the value of the prize is $8,000. Therefore, the expected net value of a raffle ticket is:

(1/150) x $8,000 - $100 = -$46.67

This means that on average, a person buying a raffle ticket can expect to lose $46.67. Therefore, the best choice is not to buy a raffle ticket.

A Children's Cancer Center Sells 150 Raffle Tickets to Raise