Difficulty: Hard
Category: Betting Games
Practice quant interview questions from top firms including Jane Street, Citadel, Two Sigma, DE Shaw, and other leading quantitative finance companies.
Topics: market-making, risk-management, probability, mental-math, inventory-management
You are playing a market-making game on the number of prime numbers less than 100. The true value is 25. You open your market with a bid-ask spread of "23 at 27". Another participant hits your bid and buys from you at 27. You are now short 1 contract. Assuming you are risk-averse and want to reduce your position immediately, and recognizing other market participants are rational, which of the following quotes would be the most likely to attract a buyer (i.e., someone who will sell to you at you
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