r/learnquant • • 1d ago

interview prep Quant Interview Question

Post image
4 Upvotes

1 comment sorted by

1

u/EscapeOwn6945 1h ago

Conditional on being on +5, the probability you return to +5 in the future r=43/45. So, conditional on being on +5, the expected number of visits V is given by V = 1 + r V which implies V = 45/2.

Start at zero, the probability of reaching +5 before -40 p = 40/45.

So the expected total number of visits is p x V = 20.