Essay
You are considering the purchase of a $10 ticket for a raffle with a grand prize of $1,000 (assume you are risk neutral).There are two prizes worth $100 and five prizes worth $20.If you know that only 100 tickets will be sold, what is the expected value of your net winnings? Should you purchase the ticket?
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Expected value = 0.01 × $1,000 + 0.02 × ...View Answer
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