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The payoff X of a lottery ticket in the Tri-State Pick 3 game is $500 with...

The payoff X of a lottery ticket in the Tri-State Pick 3 game is $500 with probability 1/1000 and $0 the rest of the time. Assume the payoffs X and Y are for separate days and are independent from each other.

a. What price should Tri-State charge for a lottery ticket so that they can break even in the long run (average profit =$ 0).

b. Find the mean and standard deviation of the total payoff X+Y.

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milcah answered 8 months ago

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