Answer:
the expected value EV = −$0.65
Step-by-step explanation:
Expected value EV = expected gain - expected loss
Given;
Cost of a ticket L = $1
Probability of losing the ticket P(L)= 999/1000 = 0.999
Cost of a flat screen TV = $350
Expected gain G = $350 - $1 = $349
Probability of winning the TV P(G) = 1/1000 = 0.001
EV = G × P(G) - L × P(L)
Substituting the values;
EV = $349 × 0.001 - $1 × 0.999
EV = −$0.65
the expected value EV = −$0.65
