Purchase Solution

Expected Return on Lotteries

Not what you're looking for?

Ask Custom Question

Assume you buy a lottery ticket, which has the odds of one winner for every 1,000 tickets sold; The ticket costs $10 and if you win, you receive $2,500. What is the expected return from buying this lottery ticket? What does the expected return % number mean?

Purchase this Solution
Solution Summary

Expected Return on Lotteries

Solution Preview

You have 0.1% chance of winning 2500, and 99.9% chance of getting nothing, and you pay $10 for the ...

Purchase this Solution
Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

View More Free Quizzes
Related BrainMass Solutions

  • Choice Under Uncertainty

    Obviously, the individual prefers the bet on a higher outcome, or the lottery, to a certain income.

  • Time Value of Money Application

    With simple interest, interest is paid just on the principal. With compound interest, the return that you receive on your initial investment is automatically reinvested. In other words, you receive interest on the interest.

  • Time Value of Money for Companies

    D) State governments - lotteries State lotteries offer lump sum payment to the winner or annual payments over certain period of time (say 30 years) to the winners of the lottery.

  • Time Value of Money & its applications in banks , lotteries

    Thanks for using Brainmass.com The solution contains a note on time value of money and its applications in various fields like banks, lotteries, credit card companies, insurance companies and retirement plan financial service providers.

  • Gaming Management Questions

    Why might some people find state lotteries more ethical than casinos? Do you think lotteries are more or less ethical than casinos? Explain your answers.

  • Time value of Money

    88828 Time Value of Money Identify at least one financial application of TVM employed by each of the following businesses: Commercial banks Credit card financial service companies Insurance companies State governments - lotteries Retirement

  • Consider a monopolist who owns a natural spring

    James, New York, and Tennessee Avenues), He or she doubles the rent charged on each property in the group.

  • Pick Four in HTML

    The solution examines a pick four in HTML for most lotteries

  • Statistics: Lottery and Decisions

    The expected values of return for lottery games is always less than 1 - it has to be, or lotteries wouldn't make any money.

View More Related Solutions