Please read the description I couldn't fit it in the question area

Question

Four hundred chances are sold at $6 apiece for a raffle. There is a grand prize of $450, two second prizes of $250, and five third prizes of $150. First calculate the expected value of the lottery. Determine whether the lottery is a fair game. If the game is not fair, determine a price that would make it fair

Answer 1

Raffle's proceeds: 6(400) = $2,400

Raffle's payouts: $450 + 2($250) + 5($150) = 450+500+750 = $1,700.

 

On this basis, you can see that the outfit conducting the raffle makes a profit, and thus the game is not fair, assuming that a fair game would average 0 profit.  A price of $6 times 17/24 = $4.25 would make the game fair.

 

E(X) = (1/400)(450-6) + (2/400)(250-6) + (5/400)(150-6) + (392/400)(-6); do you agree? I'm letting you calculate this!