Actual interview brainteaser at a top flight shop

Discussion in 'Professional Trading' started by sjfan, Dec 22, 2009.

  1. AyeYo

    AyeYo

    That makes all the difference in the world. I think that's why this is so confusing. I caught that on page 2 when he said that with $25 in hand and a bet of $25 you end up with $75. I thought I was just going crazy.
     
    #51     Dec 22, 2009
  2. sjfan

    sjfan

    To clarify: you double you bet if you win. So, if you bet $50, and you win, you get back $100. If you lose, you get back nothing.

    Another way to look at it is, if you have $100 and you bet $50, your cash will be $150 you win and $50 if you lose.

    I keep switching between the two forms of notation. Maybe that's why it's confusing to a few people.

     
    #52     Dec 22, 2009
  3. gaj

    gaj

    you'd need to have something so that if you have lost the first two, you can still win.

    so in this case, you'd have X (first round) +2x (second) +4X (third round) = 200.

    so your max drawdown can be to about 29.

    and that would mean open bet about 35.
     
    #53     Dec 22, 2009
  4. sjfan

    sjfan

    I'm not sure the betting math is right here. In round two, you have $50 on hand. You bet $25. You win. You back back $50. But since you paid $25 to make this bet, your total cash on hand is $75, not $100.

     
    #54     Dec 22, 2009
  5. sjfan

    sjfan

    First true break-thru insight!: you'd need to have something so that if you have lost the first two, you can still win.

    the second point is some what off the mark and the third point completely. But the first point you made is big conceptual step.

     
    #55     Dec 22, 2009
  6. So the R:R is 1:1 Bet $50 to Win 50$

    I was using bet $50 to win $100.
     
    #56     Dec 22, 2009
  7. sjfan

    sjfan

    Sorry if I didn't make that clear.

    Essentially, the payoff of each bet is actuarially fair to the probability of those payoffs. So HINT #3 this should rule out both simple martingale and anti-martingale strategies (but not all complex strategies that are either martingale or anti-martingale like)

     
    #57     Dec 22, 2009
  8. gaj

    gaj

    oops, yeh, i calculated wrong.

    i'll let others go along with this...thanks for making me put on my thinking cap for a little bit on a non-trading day before dinner...
     
    #58     Dec 22, 2009
  9. Ok my last guess. 37.50 37.50 If you win first 2 flips or lose first 2 flips continue with 25 50 100. If you win ONLY 1 of first 2 flips, continue with 50 50 100.
     
    #59     Dec 22, 2009
  10. Same here. This makes the game much more difficult.
     
    #60     Dec 22, 2009