TL;DR
Indicator Variables: The Swiss Army Knife of Expectation: A canonical quantitative trading interview question at intermediate difficulty. Commonly asked at Jane Street, Two Sigma, Citadel, DE Shaw, HRT, SIG.
By Valenke Exam Prep Team·Last updated 2026-06-01
intermediateExpected Value & Variance
Indicator Variables: The Swiss Army Knife of Expectation
Asked at: Jane Street, Two Sigma, Citadel, DE Shaw, HRT, SIG
Problem
(a) In a random permutation of , what is the expected number of elements in their "correct" position (fixed points)?
(b) At a party of people, each person shakes hands with every other person. Then each person independently forgets each handshake with probability . What is the expected number of pairs where exactly one person remembers the handshake?
(c) You deal a standard 52-card deck. What is the expected number of times an Ace appears directly before a King?
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