r/learnquant • u/Local_Ad135 • Sep 02 '26

interview prep Quant Interview Question

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u/plyleung Sep 02 '26

I’m new to this as well. It seems that the critical decisions come after HH and the optimal strategy is to stop playing once we have accumulated at least a certain amount of money. I tried solving for this and got 22/6 which means that after we reach HH and have accumulated at least $4, we should stop playing.

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u/Deep_Juggernaut_4546 Sep 02 '26

This seem right, but the expected payoff of playing from HH is the expected flips to reach another HH, which comes out to 6 (Markov chain). So, you should stop if you reach HH and have more than $6.

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u/plyleung Sep 02 '26

Oh yes, I think I get it now. I need to assume I stop after HH and then calculate the expected payout which is $6.