Solve a Three-Roll Optimal Stopping Game

Quick Overview

A fair six-sided die may be rolled at most three times. Explain the assumptions and derivation clearly, check edge cases, and show how the result changes when those assumptions no longer hold.

Solve a Three-Roll Optimal Stopping Game

Company: Worldquant

Role: Data Scientist

Category: Statistics & Math

Difficulty: medium

Interview Round: Technical Screen

# Solve a Three-Roll Optimal Stopping Game A fair six-sided die may be rolled at most three times. After each of the first two rolls, stop and receive that face value or continue and forfeit it; after the third, accept it. Find the fair entry price. ### Constraints & Assumptions - Entry is paid once and does not affect later stopping choices. ### Clarifying Questions to Ask - Is the objective expected value? - Must the next result be accepted after continuing from the last choice? ### What a Strong Answer Covers - Backward induction, thresholds with two and three opportunities, and the exact expectation. ### Follow-up Questions - How does the policy change for a biased die? - What is the recurrence for `r` rolls?

Quick Answer: A fair six-sided die may be rolled at most three times. Explain the assumptions and derivation clearly, check edge cases, and show how the result changes when those assumptions no longer hold.

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Feb 26, 2025, 12:00 AM
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Solve a Three-Roll Optimal Stopping Game

A fair six-sided die may be rolled at most three times. After each of the first two rolls, stop and receive that face value or continue and forfeit it; after the third, accept it. Find the fair entry price.

Constraints & Assumptions

  • Entry is paid once and does not affect later stopping choices.

Clarifying Questions to Ask Guidance

  • Is the objective expected value?
  • Must the next result be accepted after continuing from the last choice?

What a Strong Answer Covers Guidance

  • Backward induction, thresholds with two and three opportunities, and the exact expectation.

Follow-up Questions Guidance

  • How does the policy change for a biased die?
  • What is the recurrence for r rolls?
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