Expected profit on a scratch ticket
A scratch ticket costs $2 to buy. It reveals three symbols drawn independently, each of which is a star with probability . The ticket pays $50 if all three symbols are stars, and nothing otherwise. What is your expected profit per ticket (payout minus the $2 cost), in dollars to four places?
Show hints (2)+
- All three stars: multiply the independent chances, .
- Expected payout is ; profit subtracts the $2 cost.
Answer
Reveal answer →Final answer
-1.2188 (± 0.001)
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Asked at: Timed Mental-Math & Sequences, ETF Market-Making