Suppose that you buy a lottery ticket for ($ 1). The payoff is ($ 50,000), with a
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Suppose that you buy a lottery ticket for \(\$ 1\). The payoff is \(\$ 50,000\), with a probability of winning \(1 / 1,000,000\). Therefore, the expected value is
\[E=\$ 50,000\left(\frac{1}{1,000,000}ight)=\$ 0.05\]
Is this statement true or false? Explain.
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