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TL;DR

Derangements: Permutations where no element appears in its original position. This concept is essential for quantitative trading interviews and is frequently tested at top firms.

By Valenke Exam Prep Team·Last updated 2026-06-01
Combinatorics

Derangements

Permutations where no element appears in its original position.

A derangement is a permutation of nn elements where no element remains in its original position. The number of derangements DnD_n satisfies: Dn=n!k=0n(1)kk!D_n = n! \sum_{k=0}^{n} \frac{(-1)^k}{k!} For large nn, Dnn!eD_n \approx \frac{n!}{e}. Intuition: Start with the inclusion-exclusion principle. Let AiA_i be the set of permutations where element ii is fixed. Then Dn=n!A1A2AnD_n = n! - |A_1 \cup A_2 \cup \cdots \cup A_n|. By inclusion-exclusion, this gives the alternating sum above. When to use: Problems asking "how many ways can nn items be rearranged so that none is in its original position?" — secret Santa problems, misdelivered letters, hat-check problems. Alternative approach: You can always derive DnD_n from scratch using inclusion-exclusion on the full permutation set. The formula is a shortcut. First few values: D1=0, D2=1, D3=2, D4=9, D5=44D_1 = 0,\ D_2 = 1,\ D_3 = 2,\ D_4 = 9,\ D_5 = 44.

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