Expected Value Parlay Interview Intuition
Expected value parlay interview intuition for combined events, independence assumptions, correlation, and high-payout EV traps.
Candidates discussing multi-leg bet examples or product-style expected value prompts.
Combined events need combined probability
A parlay-style prompt pays only if multiple events occur. The key probability is the probability that all required events happen together.
Multiply only with independence
You can multiply probabilities directly only when the events are independent. If the events are correlated, the joint probability needs more care.
Concrete example
If two independent events each have probability 60 percent, the probability both occur is 0.6 x 0.6 = 36 percent.
High payout can still be poor value
A large payout does not guarantee positive expected value. Multiply the payout by the joint probability and subtract the cost before judging the bet.
Correlation changes the answer
Positive correlation can make both events happen together more often than an independence calculation suggests, while negative correlation can make the combined event less likely.
Common mistakes
Candidates often multiply probabilities without checking independence, or they judge the bet by payout size rather than expected value.
Practice the pattern
Use the LeetQuidity curriculum and calibration to turn this topic into a focused practice plan.