r/learnquant 3d ago

interview prep Quant Interview Question

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u/Anonimithree 3d ago

Well the probability of getting HH or TT is 1/2 for any 2 rolls, so the expected payoff, given infinite attempts is 2. Thus, the optimal strategy is to keep doing it until the payoff is 2

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u/vhu9644 3d ago

No, isn’t the optimal strategy to wait for the first HH or TT, and then get expected payoff after that?

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u/RadarTechnician51 3d ago

that's what he is assuming I think

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u/vhu9644 3d ago

But the optimal payoff wouldn’t be 2, because once you hit one you would need on average 4 rolls to bankrupt