Trading Interview - Confidence Interval
Suppose the interviewer asks you to make a market on X. Then the interviewer follows up: how confident are you in your answer? Suppose you say 90%.
1. Is your % of confidence supposed to correspond to a confidence interval here?
2. Is this interval supposed to be large or small (relative to X) for a high confidence interval %?
For #2, I've seen conflicting information on this website. For example, there is a post on this website that says, "Just remember that a higher confidence interval translates to a wider market." Yet, in the comments, someone else says, "The idea is that for things you're more confident in, you can make a tighter market." I can't link to the post since I'm new on this website, but the topic is "Interview Question: Make A Market On Anything."
Can someone with interview expertise please confirm what the right answers should be to the above 2 questions (especially #2)? On one hand, a large interval means you're very confident in the interval, since the large interval covers more space than a tight interval and hence the true value should (almost) definitely be covered. On the other hand, a tight interval means you are very confident that you don't need the interval to cover excess range, since you are confident about the true value being within the tighter range.
Amet aut in animi veritatis et nihil cumque molestiae. In quibusdam vitae soluta enim dicta beatae. Molestias labore soluta totam corrupti doloribus.
Accusamus aut iste sed sit. Soluta quisquam assumenda voluptatem veniam eos. Occaecati officiis perferendis eveniet asperiores. Incidunt est et possimus ipsa consequatur ut. Velit eum qui provident quia excepturi enim natus.
Ea et dignissimos perspiciatis voluptate aut saepe beatae. Temporibus doloribus incidunt illum ducimus. Quasi quod animi illo dolor vel.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...