Hello, It's the first time I'm writing a post so be patient if I'm not doing it properly. I have a few doubts about how to calculate the expected value of this problem. There is a raffle where there are only 80 shares and 8 prizes of $ 7500. For each share you have to pay $ 1000.
What is the calculation of expected value for 1 share ($ 1000) and how it changes according to whether you get more shares?
I came to this solution if you buy 1 share. I guess it is correct.
(7500x0,1)-(1000x0,9)= EV - 150
Since there are 80 shares and 8 prizes, you are going to win $7500 1 out of ten times. I am not sure how to calculate the EV if you buy more shares. And I dont know how to calculate the number of shares to obtain the maximum EV.
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