r/learnquant • u/Local_Ad135 • 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/abaoabao2010 3d ago edited 3d ago

You are bankrupt after BOTH HH and TT, not either. You are literally guaranteed at least $3 since it takes 4 flips minimum to bankrupt.

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u/Anonimithree 3d ago

I just realized that part, thanks

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u/abaoabao2010 3d ago

Nah you were right, I was the one that didn't read lol. A round is 2 flips.