Consider the following lottery game. For this game, tickets cost $1, and there is a 10% chance of winning $5 (a net gain of $4). What is a player's expected net gain for each ticket that is bought for this game? (Note that a loss results in a net gain of "-$1").
A) $5
B) $4
C) $0.50
D) -$0.50
E) -$1

Question

Quizplus · Accepted Answer

The expected net gain is calculated as (0.10 * $4) + (0.90 * -$1) = $0.40 - $0.90 = -$0.50.

Consider the Following Lottery Game