SCMA 301 Case 2 Probability and Expected Values Game: Power Ball Notes: The advertized jackpot is a 29 year annuity. A winner can select a one-time...

SCMA 301

Case 2

Probability and Expected Values

Game: Power Ball

           Notes:

The advertized jackpot is a 29 year annuity. A winner can select a one-time cash payment, called the “Cash Jackpot.” The Cash Jackpot is appropriately half the advertized jackpot. For these problems use the Cash Jackpot.

Assume there is only one Jackpot winner – the winner receives the entire Jackpot.

Only analyze the regular game. Ignore the “Increase Your Prize with Power Play” option.

In your report answer the following:

The website shows the odds or probabilities of winning each prize. What types of probabilities are these as defined in the text Chapter 5.3?

What is the probability of winning some prize?

What is the probability of not winning anything?

Suppose the Cash Jackpot is $50 million. What is the Expected Value of a $2.00 ticket? Be sure to include all the ways in which a ticket can win in addition to the Jackpot.What is the meaning of the expected value calculated in part d?       Is this a good bet? Why or why not?Suppose you purchased ten $2.00 tickets, each with a different set of numbers (total bet $20.00). What is the expected value of the $20.00 bet? Assume the Cash Jackpot is $50 million.