Easy · Expected Value & Decision Theory · Multiple choice · ~3 min · #75

Twenty per Head or Five Hundred for Four

Real interview · Akuna Capital

You flip a fair coin four times. Game 1 pays 20 dollars for every head. Game 2 pays 500 dollars only if all four flips are heads. Which game has the higher expected payout?

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Worked solution

Give the problem an honest attempt first, then reveal the full explanation.

Reported in interviews

Akuna CapitalGlassdoor interview question

Candidate-reported and unverified; the firm may phrase it differently or no longer ask it. The wording here is our own paraphrase, and the solution was written and checked independently of any answers posted at the source.

Concepts

Linearity of expectationRisk vs expected value

Relevant for

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