Random Walk Quant Interview Questions
Random walk interview prep for absorbing barriers, gambler ruin, expected hitting times, and state recursion.
Candidates preparing for recursive probability and stochastic process prompts.
What random walks test
Random walks test whether you can define state and boundary conditions. The interviewer is usually less interested in a memorized gambler ruin formula than in how you set up the recurrence.
Concrete example
If a walk starts at 1 and moves up or down with equal probability until hitting 0 or 3, the chance of hitting 3 first is 1/3. The linear solution comes from p_i = 0.5p_{i-1} + 0.5p_{i+1} with p_0 = 0 and p_3 = 1.
How to practice
Write states, transitions, and boundary values before solving. For expected time, use E_i = 1 plus the average of neighboring states. For hitting probability, remove the +1 and solve probabilities instead.
Common mistakes
Candidates forget absorbing boundaries or use the same recurrence for probability and expected time. Another trap is solving a biased walk as if it were symmetric. Name the transition probabilities explicitly.
Practice the pattern
Use the LeetQuidity curriculum and calibration to turn this topic into a focused practice plan.