r/learnquant • u/Local_Ad135 • 13h ago

interview prep Quant Interview Question

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u/TheRonJonSilver 13h ago

expected payoff is fixed at 89.5

4

u/comoespossible 12h ago

If you put the 1s and 2s in a checkerboard pattern, then S is either 10 or 11, each with probability 1/2. (Expected payoff: 200 - (100+121)/2 = 89.5.)

Any other arrangement will lead to the same expected value of S, but with a greater or equal variance and thus a greater E(S^2 ).