Two Managers, One Fund

What this conditional probability interview question tests

This is an easy probability question that appears frequently in quant interviews because it probes whether a candidate can correctly apply conditional probability reasoning. Many people intuitively reach for the wrong answer, making it an effective filter for sloppy thinking.

The core skill is recognizing that new information constrains the outcome space. You must identify which outcomes are still possible given the constraint, recalculate the relative likelihood of each, and renormalize. This mirrors how traders update beliefs when new market data arrives.

• Sample space reduction under conditioning
• Bayes' rule and the definition of conditional probability
• Common pitfalls in probability reasoning