The first prize for a raffle is P500,000 (0.001) and the second prize is P250,000 (0.003). What is a fair price to pay for a single ticket in this raffle?

Answer 1

Hi Mitch Z.,

Though there's probably an exclusion to winning both prizes, but the probabilities are low for each, you can just add the expected payoffs (value*probability for each).

--Cheers, -- Mr. d.