350 Frequently Asked Questions In Quantitative Finance

T

he following Brainteasers have all been taken from

wilmott.com. They are all the type of questions

you could easily face during a job interview. Some

of these questions are simple calculation exercises,

often probabilistic in nature reflecting the importance of

understanding probability concepts, some have a ‘trick’

element to them, if you can spot the trick you can solve

them, otherwise you will struggle. And some require

lateral, out of the box, thinking.

The Questions

Russian roulette I have a revolver which holds up to six

bullets. There are two bullets in the gun, in adjacent

chambers. I am going to play Russian roulette (on my

own!), I spin the barrel so that I don’t know where the

bullets are and then pull the trigger. Assuming that I

don’t shoot myself with this first attempt, am I now bet-

ter off pulling the trigger a second time without spinning

or spin the barrel first?

(Thanks to pusher.)

Matching birthdays You are in a room full of people,

and you ask them all when their birthday is. How

many people must there be for there to be a greater

than 50% chance that at least two will share the same

birthday?

(Thanks to baghead.)

Another one about birthdays At a cinema the manager

announces that a free ticket will be given to the first per-

son in the queue whose birthday is the same as some-

one in line who has already bought a ticket. You have

the option of getting in line at any position. Assuming