Suppose a charitable organization decides to raise money by raffling a trip worth $500. If 3,000 tickets are sold at $1.00 each, find the expected value of winning for a person who buys 1 ticket.
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If he wins, the change in his financial holdings is $500-1=+499.
If he loses, the change in his financial holdings is $-1.
The probability he will win is 1%2F3000 (one ticket out of 3000)
and the probability he will lose is 2999%2F1000.
Therefore, his expected net winnings are:
E+=+499%281%2F3000%29+%2B+%28-1%29%282999%2F3000%29..........(winning $1 bet).