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Sig·Software Engineer·Technical Phone Screen·Junior

Junior
Apr 2026

Summary

SIG quant researcher interview with a probability puzzle that looks clean on the surface but has enough moving parts to slow you down if you're not careful with the state space.

Questions Asked (1)

Q1

You start with 3 tokens and want to reach 5 before going broke. Each turn you bet the maximum amount that won't overshoot your target (so you bet aggressively but never past 5). Each bet doubles with probability 1/4 or is lost with probability 3/4. What's the probability you hit 5 tokens before 0?

Algorithms & Data StructuresTechnical Trade-offs
Author's notes

The bold strategy part is what makes this annoying.

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AI HintsAI Generated

Suggested Approach

Model the problem as a Markov chain with states representing token counts, and set up equations for the probability of reaching 5 before 0. Solve the equations step by step, starting from the state closest to the target, and compute the final probability for state 3.

Pro tip: Always verify your solution by checking boundary conditions and ensuring probabilities are between 0 and 1; also, consider if the betting strategy is optimal or if there's a simpler way to see the answer.

1. Define states and transitions

Identify the possible token counts (0,1,2,3,4,5) and determine the betting amount from each state based on the rule: bet the maximum that won't overshoot 5.

2. Set up equations

Let P(n) be the probability of reaching 5 before 0 starting with n tokens. Write equations using the win/loss probabilities and the transitions from each state.

3. Solve from boundaries

Use the known values P(0)=0 and P(5)=1, and solve the equations backwards from state 4 down to state 1.

4. Compute P(3)

Substitute the solved values into the equation for state 3 to find the final probability.

5. Verify and interpret

Check that the probability is between 0 and 1, and briefly discuss the result in the context of the problem.

Key Points to Mention

  • Markov chain modeling and state transitions
  • Setting up recursive equations for hitting probabilities
  • Solving linear equations with boundary conditions
  • The specific betting strategy: bet min(n, 5-n) tokens
  • Win probability 1/4 and loss probability 3/4
  • Final probability calculation and interpretation

AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.