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DRW·Data Scientist·Technical Phone Screen·Intermediate

Intermediate
Jul 2026

Summary

Quant-heavy technical screen for a Data Scientist role at DRW. Three probability and stats problems back to back, the kind where you have to show actual derivations not just state answers. Felt more like a math exam than a conversation.

Questions Asked (3)

Q1

Given a finite-state, irreducible, aperiodic Markov chain with a provided transition matrix P, compute the stationary distribution π by solving πP = π subject to the probabilities summing to 1. Also explain why the solution is unique.

Algorithms & Data StructuresTechnical Trade-offs
Author's notes

The mechanics of solving the linear system were fine but the uniqueness part tripped me up a bit.

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AI HintsAI Generated

Suggested Approach

First, explain that the stationary distribution is the left eigenvector of P corresponding to eigenvalue 1, and that it can be found by solving the linear system π(P - I) = 0 with the normalization constraint. Then, discuss why irreducibility and aperiodicity guarantee a unique stationary distribution, and outline the computational steps to solve the system.

Pro tip: Mention that in practice, for large state spaces, iterative methods like power iteration are used instead of direct linear algebra, and note that the stationary distribution is also the limiting distribution due to aperiodicity and irreducibility.

1. Set up the equations

Write the stationarity condition πP = π as a system of linear equations, and include the normalization constraint ∑π_i = 1.

2. Solve the linear system

Solve the system by replacing one of the redundant equations with the normalization constraint, then use standard linear algebra techniques (e.g., Gaussian elimination) to find π.

3. Explain uniqueness

Argue that irreducibility ensures a unique stationary distribution (up to scaling), and aperiodicity ensures that the chain converges to it, so the normalized solution is unique.

4. Discuss computational considerations

Mention that for large chains, direct methods may be inefficient, and iterative methods like power iteration or solving the eigenvector problem numerically are preferred.

Key Points to Mention

  • Stationary distribution satisfies πP = π and ∑π_i = 1.
  • The system π(P - I) = 0 has a one-dimensional solution space due to irreducibility.
  • Aperiodicity ensures the chain is ergodic, so the stationary distribution is unique and is also the limiting distribution.
  • The normalization constraint resolves the scaling ambiguity.
  • Computational methods: direct linear solve, eigenvalue decomposition, or iterative methods like power iteration.
  • For large state spaces, numerical stability and efficiency are important considerations.

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

Q2

With X drawn from an Exponential distribution with rate λ and N drawn from a Poisson distribution with the same parameter λ, derive E[X] and E[N] from first principles, showing the integration and summation steps explicitly.

Algorithms & Data Structures
Author's notes

Straightforward if you've done it before.

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AI HintsAI Generated

Suggested Approach

Start by clearly stating the definitions of the Exponential and Poisson distributions and their respective probability mass/density functions. Then, derive E[X] by setting up and evaluating the integral ∫₀^∞ x λ e^{-λx} dx using integration by parts, and derive E[N] by evaluating the sum ∑_{n=0}^∞ n e^{-λ} λ^n / n! by simplifying the term and recognizing the series expansion of e^λ. Conclude by noting that both expectations equal 1/λ and λ respectively, and briefly comment on the relationship between the two distributions.

Pro tip: Emphasize the connection between the Exponential and Poisson distributions—both arise from a Poisson process—and mention that the rate parameter λ represents the average number of events per unit time, so the expected waiting time between events is 1/λ. This shows deeper understanding beyond rote calculation.

1. State definitions and goal

Clearly write the PDF of X ~ Exponential(λ) as f(x) = λ e^{-λx} for x ≥ 0, and the PMF of N ~ Poisson(λ) as P(N = n) = e^{-λ} λ^n / n! for n = 0, 1, 2, ... . State that you will compute E[X] = ∫₀^∞ x f(x) dx and E[N] = ∑_{n=0}^∞ n P(N = n).

2. Derive E[X] via integration by parts

Set up the integral E[X] = ∫₀^∞ x λ e^{-λx} dx. Use integration by parts with u = x, dv = λ e^{-λx} dx, so du = dx and v = -e^{-λx}. Evaluate the boundary term [ -x e^{-λx} ]₀^∞ = 0 and the remaining integral ∫₀^∞ e^{-λx} dx = 1/λ, giving E[X] = 1/λ.

3. Derive E[N] via summation

Write E[N] = ∑_{n=0}^∞ n e^{-λ} λ^n / n!. Note that the n=0 term is zero, so start from n=1. Cancel n with n! to get n/n! = 1/(n-1)!, factor out λ e^{-λ}, and re-index the sum to obtain λ e^{-λ} ∑_{k=0}^∞ λ^k / k! = λ e^{-λ} e^{λ} = λ.

4. Summarize and connect

State the final results: E[X] = 1/λ and E[N] = λ. Briefly explain the intuitive link: in a Poisson process with rate λ, the expected number of events in a unit interval is λ, while the expected waiting time between events is 1/λ.

Key Points to Mention

  • Exponential PDF: f(x) = λ e^{-λx} for x ≥ 0, and its support.
  • Poisson PMF: P(N = n) = e^{-λ} λ^n / n! for n = 0, 1, 2, ... .
  • Integration by parts technique for E[X], including handling the boundary term at infinity.
  • Summation technique for E[N], including canceling n with n! and recognizing the Taylor series for e^λ.
  • The relationship between Exponential and Poisson distributions via a Poisson process.
  • Interpretation of λ as the rate parameter and the reciprocal relationship between the two expectations.

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

Q3

For a given 2x2 zero-sum game payoff matrix (payoffs to Player A), find the mixed-strategy Nash equilibrium and calculate the probability each player places on their first action.

Algorithms & Data StructuresTechnical Trade-offs
Author's notes

This one caught me more than I expected.

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AI HintsAI Generated

Suggested Approach

First, explain that a mixed-strategy Nash equilibrium in a 2x2 zero-sum game can be found by making each player indifferent between their two pure strategies. Then, set up equations for Player A's expected payoff from each action (given Player B's probabilities) and for Player B's expected payoff from each action (given Player A's probabilities), solve for the probabilities, and verify the equilibrium.

Pro tip: Mention that the equilibrium probabilities depend only on the payoffs of the opponent, not on your own payoffs, and that you can quickly check your work by ensuring the expected payoffs for each player are equal across their actions.

1. Define the game and variables

Label the payoff matrix entries (a, b, c, d) for Player A, and let p be the probability Player A chooses the first action, and q be the probability Player B chooses the first action.

2. Set up indifference equations

For Player A, set expected payoff from action 1 equal to expected payoff from action 2, given q. For Player B, set expected payoff from action 1 equal to expected payoff from action 2, given p.

3. Solve for probabilities

Solve the two linear equations for p and q. The solution gives the mixed-strategy Nash equilibrium probabilities.

4. Verify and interpret

Check that p and q are between 0 and 1. If not, the equilibrium may be pure. Also, compute expected payoffs to ensure they are equal across actions for each player.

Key Points to Mention

  • Zero-sum game: one player's gain is the other's loss, so payoffs sum to zero.
  • Mixed strategy: players randomize to make the opponent indifferent.
  • Indifference principle: at equilibrium, each player's expected payoff is the same for all actions played with positive probability.
  • Solving linear equations: the probabilities are found by setting expected payoffs equal.
  • Verification: ensure probabilities are valid and that no player can improve by deviating.
  • Application to data science: game theory concepts are used in adversarial settings, reinforcement learning, and decision-making under uncertainty.

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