A raffle ticket costs $5. First-prize and second-prize winners will be drawn at random. The probability of winning the $100 first prize is 1/40, and the probability of winning the $25 second prize is 1/20. What is the mean winnings for one play, taking into account the $5 cost of the ticket?
A) −$1.25
B) −$0.875
C) $3.375
D) $3.75

Question

Quizplus · Accepted Answer

The expected winnings are calculated as follows: (1/40 * $100) + (1/20 * $25) - $5 = $2.50 + $1.25 - $5 = -$1.25.

A Raffle Ticket Costs $5