Posted by Andrew on .
The local lottery sets up a game wherein a player has a chance of collecting $750.
The player must choose a 3-digit number and if it matches, the player receives $750
It costs $1 to play the game.
What is the expected profit (or loss) for each player.
PLEASE ANSWER ASAP!!!!!!!!!!
I will assume that the smallest 3 digit number is 100 and the largest 999, giving up 900 possible 3 digit numbers (999-99)
So the prob of picking the correct number is 1/900
the expected return is 1/900 * $750 = $0.83
So the expected loss per play is 17 cents.