Tough Interview Questions : Hedge Fund Brainteasers : Which Carton Has Which Eggs?

In this video, Jeff Altman, The Big Game Hunter poses one of those tricky brainteaser questions that is so often used by hedge funds and investment banks. 

Jeff Altman, The Big Game Hunter has been a recruiter for more than 40 years.

Follow him at the Big Game Hunter, Inc. on LinkedIn for more articles, videos and podcasts than what are offered here and jobs he is recruiting for.

Visit my website, http://www.TheBigGameHunter.us to sign up for a complimentary subscription to No B.S. Job Search Advice  Ezine, pay what you want for my books and guides to job hunting and watch hundreds of other videos about job hunting and hiring.

Connect with me on LinkedIn.

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Tough interview Questions: What's the Probability of Two Dice Coming Up With Different Numbers?

Jeff Altman, The Big Game Hunter explains how to answer this brain teaser, "What is the probability of two regulation dice coming up with different numbers?"

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Jeff Altman, The Big Game Hunter has been a recruiter for more than 40 years.

Follow him at the Big Game Hunter, Inc. on LinkedIn for more articles, videos and podcasts than what are offered here and jobs he is recruiting for.

Visit my website, http://www.TheBigGameHunter.us to sign up for a complimentary subscription to No B.S. Job Search Advice  Ezine, pay what you want for my books and guides to job hunting and watch hundreds of other videos about job hunting and hiring.

Connect with me on LinkedIn.

Subscribe to TheBigGameHunterTV on YouTube for advice about job hunting and hiring. Like videos, share and comment.

Listen to Job Search Radio, No B. S. Job Search Advice Radio and No B. S. Hiring Advice Radio in iTunes and other podcast directories and apps.

Want to ask me a question via email, chat,  phone or video? Reach me via PrestoExperts

Sample Questions for Quantitative Roles

Statistics
How do you test whether a data sample is normal or not?

Math
Show that a set is convex if and only if its intersection with any line is convex. Show that a set is affine if and only if its intersection with any line is affine.

Bond Pricing
I don't know anything about bond pricing, but I've heard people use something called the discount rate when they price bonds. Can you explain what this "discount rate" is? Why is it important? Where do I get its value? What is the current discount rate (as of today)? When I price a 30-year bond, should I use today's discount rate or should I use a different discount rate for each of the next 30 years?

Probability Theory
Say you are on a game show [historical side note: this question was first played on the 60s American game show Let's Make a Deal, hosted by Monty Hall], and there are three closed doors. Behind one door is a car, the prize you dream of, and behind the other two are goats. You pick a door. The host, who knows what's behind each door, opens another which reveals a goat. Now, the host lets you make another choice: should you stick with you first door choice, or should you switch and pick a different door, in order to win the car?

Applied MathWhat's a Hermitian matrix? What important property does a Hermitian matrix's eigenvalues possess? What's the practical implication of this property in applications?Econometrics - Time Series
Is an AR(p) process stationary? Why or why not?
Tough question: in practice, how do you determine the order of an MA or AR model?

Statistics
Random variable X is distributed as N(a, b), and random variable Y is distributed as N(c, d). What is the distribution of (1) X+Y, (2) X-Y, (3) X*Y, (4) X/Y?
(Comment: another very popular quant interview question, regardless of whether the position itself involves statistical modeling)

Econometrics
What are some of the causes of heteroskedasticity? How do you test for the presence of heteroskedasticity? (Please name at least two tests.) Finally, what are some of the techniques for dealing with heteroskedasticity?

Options
What's put-call parity in option pricing? How does one derive this relationship? What crucial assumptions are necessary?

Tough case question: if you observe put-call parity not currently holding in the market, how do you make money off this observation? As you trade, what do you need to watch out for and what risks must you be aware of?

Math - Stochastics
Show that exp{-t/2 + W(t)} is a martingale.

Portfolio Theory
Consider the utility function U(W) = W-1/2 . What are the characteristics of this function with respect to absolute and relative risk aversion?
Explain the difference between absolute and relative risk aversion.
[First question taken from chapter 10 of Elton, et al. Modern Portfolio Theory and Investment Analysis]

C++
Is the following valid C++ code? If so, what does it print?
cout << (int *) "Home of the jolly bytes"; Taken from chapter 4 of Prata, C++ Primer Plus (5th ed.) Financial Economics-Related Case Question
When you trade stocks, what are some of the different types of cost associated with your trading? How would you mitigate each type of cost?
(Hint: a cost need not be explicit...)

Econometrics - Time Series
What's a GARCH model? Why is it an important/useful model? When would you use the GARCH model?
Can you write down its general formulation? What does the GARCH model say in plain English? What does it "try" to achieve?
How do you determine the order of the model? How do you estimate the model in practice?
Tough follow-up question: how do you implement a GARCH model in Excel?

Econometrics - Time Series
People use the GARCH model to study volatility. Can you tell me if we can use the GARCH framework to study the correlation between two assets/time series? If so, what additional assumptions and/or adjustments must we make to the original GARCH model?

Brainteaser
With an ordinary tape measure and a watch, how would you measure the exact height of the Empire State Building (or the Sears Tower, or the Big Ben Clock Tower, or the Oriental Pearl TV Tower, or any famous tall building)?

Brainteaser - Logic - Deduction
(There are many versions of this type of question. Here are some examples.)
1. How many pizzas are consumed every day in the U.S.?
2. How many gas stations are there in the U.S.?
3. How many cars are stolen every month in the U.S.?
4. How many prostitutes do you think work the streets in New York (or London, or L.A., or Shanghai, or Tokyo, or Singapore, ...)?
5. How many quants are there in the world?
6. How many people make their livings on Wall Street?
7. How many university graduates try to find a job on Wall Street each year?
8. How many tennis balls can you fit in a Boeing 747 (or Airbus A320)?
9. How many Yankees fans go to every home game each season?
10. How many people in China can speak English?

Case Question
You work for an arbitrage desk. Your model shows that if you bought stock A and simultaneously sold stock B, you have a 51.3% chance of making a profit by today's close. Should you make this trade?

Control Theory
The latest "hot" topic in financial research is using the Kalman filter in various applications. Can you explain the basic idea behind the Kalman filter (i.e., what does the filter try to do with the data)? Can you write the basic Kalman filter model? What are some of the applications of the Kalman filter?
Tough question: How do you estimate (or implement) the Kalman filter? For example, to study stock price movement.

Asset pricing
Tell me the intuition behind CAPM. Can you write down the model? What does each of the variables stand for?

Two tough advanced questions: How do you test CAPM using real data? What are the major points of criticism against CAPM?

Econometrics
When modeling binary-choice problems, what are the advantages of using logit over probit? What are the disadvantages of logit vs. probit?

What about multiple-choice models: is logit or probit better?

Finance
What does VaR (value at risk) measure? What are some of the assumptions behind the VaR concept? Given two portfolios A and B, does the following relationship hold: VaR(A+B) = VaR(A) + VaR(B)? Why or why not (i.e., prove your previous answer)?

Stochastic Calculus
What is Ito's Lemma? What is its significance in studying stochastic processes? How is it used in finance? Can you write out the equation?

When used to model financial derivatives, what assumptions must be made of the properties of the derivatives for Ito's Lemma to be applied correctly?

Programming
I give you a text file, x.txt, which has millions of records with three columns in each record:
ID, age, income

The records are sorted by ID, and no two IDs are the same.

Now, write a short program in each of the following languages to pull out 10,000 randomly selected records from x.txt. Put these 10,000 randomly pulled records in an output file called y.txt.
C++
Visual Basic
Matlab
Perl
Python
SAS
R or S-Plus
UNIX shell script

Programming
You get the same input file x.txt with millions of records sorted by ID. However, some records are missing either age or income.

Now, your task is to write a program to pull out a random sample of 10,000 records, but only those with neither age nor income missing.

(Comment: both questions #21 and #22 test your ability to both write a working program and to produce an efficient program - but foremost you must write a program that works correctly)

Linear Algebra
In linear algebra, why are we interested in matrix decompositions? Explain each of the following:
LU decomposition

Singular value decomposition (SVD)

Cholesky decomposition

QR decomposition

When and how is each of these decomposition techniques applied?

(Comment: matrix operations, including decompositions, are extremely important in applied quantitative finance - they are often the clue between modeling and implementation)

Mathematical Brainteaser
Answer this as fast as you can, without writing anything down:

The perimeter of a right triangle is 5 inches. The two legs are each 2 inches long. What's the length of the hypotenuse?

Finance - Asset Pricing
Can you show me how the APT model is derived? What's the intuition behind APT? How does it compare to CAPM? What are some of the criticisms of APT?

Mathematics
What is Jensen's Inequality? What are some of its applications? Can you write out the inequality and provide a sketch of a proof?

(Hint: Jensen's Inequality is an important concept in probability theory; other important inequalities include Hölder's Inequality and Minkowski's Inequality)

Economics - Game Theory
What's a Nash equilibrium? Can you write down its formal definition? Can you provide an example?

SQL
In SQL, what's an inner join and what's an outer join? What's the difference between a left join and a right join?

Statistics
How do you calculate sample variance? Show me the formula and implement it in C or C++.

Finance Case Question
There are two stocks A and B. I already own A, but I'm thinking of buying B to replace A. (I can only own either A or B at the same time.) I'm a U.S.-based investor subject to all U.S. taxes. How will my tax situation affect my decision whether to keep A, or to sell A and buy B? Please explain in detail.

Probability Theory
There are 30 people in my group. What are the odds that at least two people share the same birth month and day (e.g., July 25). What are the odds that exactly two people share the same birth month and day? Finally, what are the odds that everybody was born in the same decade (where a decade is defined as any ten-year span, not necessarily "50s" or "60s" or "70s" etc.)?

Statistics
What's the difference between the t-stat and R2 in a regression? What does each measure? When you get a very large value in one but a very small value in the other, what does that tell you about the regression?

Options
Can you plot an option's delta as a function of the underlying stock's price? What does this plot tell you?

Perl
In Perl, given a hash %bonus where the key is employee ID and the value represents the employee's expected year-end bonus, sort this hash by value from highest bonus to lowest.
Bonus question: how would you do this whole ID-->bonus mapping and sorting in C++ or C#?

Brainteaser
(The interviewer writes down the following equation on the whiteboard...)
XI + I = X

This is an equation expressed in Roman numerals. Imagine this equation is actually written out using sticks. 

Without touching or adding any stick, how can you make this equation true?

Financial Time Series
What is Principal Component Analysis? Please explain in plain English as well as write down the model.
How does PCA differ from factor analysis?(Comment: PCA is used heavily in studying asset returns; it is, for instance, a backbone of statistical arbitrage models)

Probability Theory
You are offered to play a game of chance. A fair coin is tossed repeatedly until you get the first tails, at which point the game ends and you get the prize. The prize "pot" starts at $1 and doubles each time you get heads. So for instance, if you get heads the first toss, the pot becomes $2. If you get heads again the second toss, the pot becomes $4. If you get heads the third time, the pot becomes $8. If the fourth toss gives you the tail of the coin, you win and take home the $8 prize.

Before you play, you must pay a fee to enter this game. The question is, what's the maximum amount you're willing to pay in order to play this game? Explain your answer carefully.

Probability Theory
What's the expectation of a uniform(a, b) distribution? What's its variance? Please derive your answers in mathematical terms, starting with the pdf.

Derivatives
Explain the difference between a futures contract and a forward contract. How are they priced differently?

Statistics
Given a dataset, how do you determine its sample distribution? Please provide at least two methods.

Algebra
Let n be a natural number. Give the reduced expression for the following:
(1) 1+2+3+...+n
(2) 1+22+32+...+n2
(3) 1+23+33+...+n3
(4) 1+2k+3k+...+nk, where k is another natural number.

C++
What are virtual functions in C++? What are they used for? Please write down an example of a virtual function to illustrate its usage.

Stochastics
A random walk process starts at the point 0. What is the probability that this random walk hits -2 before it hits 3? What if the process is a Brownian motion instead?

Options
What is the lower bound for the price of a European call option on a non-dividend-paying stock? Can you derive this lower bound in a formal fashion?
Now, what if the call option is American? What if the stock pays a dividend every quarter?

Excel
There are at least two ways in Excel to perform an OLS regression. What are they? What are some of the limitations of doing OLS in Excel (as opposed to using a real statistical package like EViews, Stata, R, S-Plus, or SAS)?

Capital Markets
Why do price spreads exist in asset-trading markets? Can spreads ever be negative? If so, under what conditions?
Tougher: what are some examples of markets where price spreads do not necessarily exist?


Jeff Altman 
The Big Game Hunter
www.TheBigGameHunter.us

JeffAltman@TheBigGameHunter.us

© 2008, 2014 all rights reserved.

Tough Interview Question #51: Describe a time when you have solved a problem with an unconventional solution

This question also allows you to show your logical thinking process, alongside other abilities such as communication and persuasion skills, as well as drive.

The best candidates will relate their answer with an example of their past experience and talk you through what the problem was, what creative solution they came up with, what steps they took to implement the solution, and the outcome.

The interviewer is not just looking for someone who is capable of doing the job, but one who could also think out of the box and bring in new perspective to the team and the firm.


Jeff Altman 
The Big Game Hunter
www.TheBigGameHunter.us

JeffAltman@TheBigGameHunter.us

© 2008 all rights reserved.

Tough Interview Questions: #50: The Price of Fruit

There are four groups of Mangoes, Apples and Bananas as follows:
Group I : 1 Mango, 1 Apples and 1 Banana
Group II : 1 Mango, 5 Apples and 7 Bananas
Group III : 1 Mango, 7 Apples and 10 Bananas
Group IV : 9 Mango, 23 Apples and 30 Bananas

Group II costs Rs 300 and Group III costs Rs 390.

Can you tell how much does Group I and Group IV cost?

Group I costs Rs 120 and Group IV costs Rs 1710

Assume that the values of one mango, one apple and one banana are M, A and B respectively.

From Group II : M + 5A + 7B = 300
From Group III : M + 7A + 10B = 390

Subtracting above to equations : 2A + 3B = 90

For Group I :
= M + A + B
= (M + 5A + 7B) - (4A + 6B)
= (M + 5A + 7B) - 2(2A + 3B)
= 300 - 2(90)
= 300 - 180
= 120

Similarly, for Group IV :
= 9M + 23A + 30B
= 9(M + 5A + 7B) - (22A + 33B)
= 9(M + 5A + 7B) - 11(2A + 3B)
= 9(300) - 11(90)
= 2700 - 990
= 1710

Thus, Group I costs Rs 120 and Group IV costs Rs 1710.

Jeff Altman

The Big Game Hunter
Concepts in Staffing
jeffaltman@cisny.com

© 2008 all rights reserved.

Jeff Altman, The Big Game Hunter, is Managing Director with Concepts in Staffing, a New York search firm, He has successfully assisted many corporations identify management leaders and staff in technology, accounting, finance, sales, marketing and other disciplines since 1971. He is a practicing psychotherapist and is a retired certified leader of the ManKind Project, a not for profit organization that assists men with life issues.

To receive a daily digest of positions emailed to you, search job openings, use his free job lead search engine, Job Search Universe. to subscribe Jeff’s free job search ezines, Head Hunt Your Next Job and/or Natural Selection (his free recruiting ezine), or to find out about his VIP Personal Search Agent service, go to http://www.jeffaltman.com.

If you would like Jeff and his firm to assist you with hiring staff or locating consultants, or if you would like help with a strategic job change, send an email to him at thebiggamehunter@cisny.com (If you’re looking for a new position, include your resume).

Tough Interview Questions: #50: The Price of Fruit

There are four groups of Mangoes, Apples and Bananas as follows:
Group I : 1 Mango, 1 Apples and 1 Banana
Group II : 1 Mango, 5 Apples and 7 Bananas
Group III : 1 Mango, 7 Apples and 10 Bananas
Group IV : 9 Mango, 23 Apples and 30 Bananas
Group II costs Rs 300 and Group III costs Rs 390.
Can you tell how much does Group I and Group IV cost?

Group I costs Rs 120 and Group IV costs Rs 1710
Assume that the values of one mango, one apple and one banana are M, A and B respectively.
From Group II : M + 5A + 7B = 300
From Group III : M + 7A + 10B = 390
Subtracting above to equations : 2A + 3B = 90
For Group I :
= M + A + B
= (M + 5A + 7B) - (4A + 6B)
= (M + 5A + 7B) - 2(2A + 3B)
= 300 - 2(90)
= 300 - 180
= 120
Similarly, for Group IV :
= 9M + 23A + 30B
= 9(M + 5A + 7B) - (22A + 33B)
= 9(M + 5A + 7B) - 11(2A + 3B)
= 9(300) - 11(90)
= 2700 - 990
= 1710
Thus, Group I costs Rs 120 and Group IV costs Rs 1710.


Jeff Altman 
The Big Game Hunter
www.TheBigGameHunter.us

JeffAltman@TheBigGameHunter.us

© 2008 all rights reserved.

Tough Interview Question #49: The 50m long army platoon

There is a 50m long army platoon marching ahead. The last person in the platoon wants to give a letter to the first person leading the platoon. So while the platoon is marching he runs ahead, reaches the first person and hands over the letter to him and without stopping he runs and comes back to his original position.
In the mean time the whole platoon has moved ahead by 50m.
The question is how much distance did the last person cover in that time. Assuming that he ran the whole distance with uniform speed.

The last person covered 120.71 meters.
It is given that the platoon and the last person moved with uniform speed. Also, they both moved for the identical amount of time. Hence, the ratio of the distance they covered - while person moving forward and backword - are equal.
Let's assume that when the last person reached the first person, the platoon moved X meters forward.
Thus, while moving forward the last person moved (50+X) meters whereas the platoon moved X meters.
Similarly, while moving back the last person moved [50-(50-X)] X meters whereas the platoon moved (50-X) meters.
Now, as the ratios are equal,
(50+X)/X = X/(50-X)
(50+X)*(50-X) = X*X
Solving, X=35.355 meters
Thus, total distance covered by the last person
= (50+X) + X
= 2*X + 50
= 2*(35.355) + 50
= 120.71 meters
Note that at first glance, one might think that the total distance covered by the last person is 100 meters, as he ran the total lenght of the platoon (50 meters) twice. TRUE, but that's the relative distance covered by the last person i.e. assuming that the platoon is stationary.


Jeff Altman 
The Big Game Hunter
www.TheBigGameHunter.us

JeffAltman@TheBigGameHunter.us

© 2008 all rights reserved.

Tough Interview Question #48: Move A Safe

To move a Safe, two cylindrical steel bars 7 inches in diameter are used as rollers.
How far will the safe have moved forward when the rollers have made one revolution?


The safe must have moved 22 inches forward.
If the rollers make one revolution, the safe will move the distance equal to the circumference of the roller. Hence, the distance covered by the safe is
= PI * Diameter (or 2 * PI * Radius)
= PI * 7
= 3.14159265 * 7
= 21.99115
= 22 inches approx

Jeff Altman 
The Big Game Hunter
www.TheBigGameHunter.us

JeffAltman@TheBigGameHunter.us

© 2008 all rights reserved.

Tough Interview Question #47: Who Is Married to Cam

Three men - Sam, Cam and Laurie - are married to Carrie, Billy and Tina, but not necessarily in the same order.
Sam's wife and Billy's Husband play Carrie and Tina's husband at bridge. No wife partners her husband and Cam does not play bridge.
Who is married to Cam?

Carrie is married to Cam.
"Sam's wife and Billy's Husband play Carrie and Tina's husband at bridge."
It means that Sam is not married to either Billy or Carrie. Thus, Sam is married to Tina.
As Cam does not play bridge, Billy's husband must be Laurie.
Hence, Carrie is married to Cam.


Jeff Altman 
The Big Game Hunter
www.TheBigGameHunter.us

JeffAltman@TheBigGameHunter.us

© 2008 all rights reserved.

Tough Interview Question #46: The Cricket Match

The cricket match between India and Pakistan was over.
• Harbhajan scored more runs than Ganguly.
• Sachin scored more runs than Laxman but less than Dravid
• Badani scored as much runs as Agarkar but less than Dravid and more than Sachin.
• Ganguly scored more runs than either Agarkar or Dravid.
Each batsman scored 10 runs more than his immediate batsman. The lowest score was 10 runs. How much did each one of them score

A simple one. Use the given facts and put down all the players in order. The order is as follow with Harbhajan, the highest scorer and Laxman, the lowest scorer.
1. Harbhajan
2. Ganguly
3. Dravid
4. Badani, Agarkar
5. Sachin
6. Laxman
Also, as the lowest score was 10 runs. Laxman must have scored 10, Sachin 20, Badani & Agarkar 30 and so on.
1. Harbhajan - 60 runs
2. Ganguly - 50 runs
3. Dravid - 40 runs
4. Badani, Agarkar - 30 runs each
5. Sachin - 20 runs
Laxman - 10 runs


Jeff Altman 
The Big Game Hunter
www.TheBigGameHunter.us

JeffAltman@TheBigGameHunter.us

© 2008 all rights reserved.

Tough Interview Question #45: The Orange Glass

An orange colored glass has Orange juice and white colored glass has Apple juice both of equal volumes. 50ml of the orange juice is taken and poured into the white glass. After that similarly, 50ml from the white glass is poured into the orange glass.

Of the two quantities, the amount of apple juice in the orange glass and the amount of orange juice in the white glass, which one is greater and by how much?

Answer:

The two quantities are equal.

Solve it by taking example. Let's assume that both glasses contain 450 ml of juice each.

Now, 50ml of the orange juice is taken and poured into the White glass. Hence, orange colored glass contains 400 ml of Orange juice and white glass contains 450 ml of Apple juice and 50 ml of Orange juice i.e. total of 500 ml from white glass contains 450 ml of Apple juice and 50 ml of Orange juice. It means that every 50 ml from white glass contains 45 ml of Apple juice and 5 ml of Orange juice.

Similary, 50 ml of juice from white glass is poured into orange glass. Now this 50 ml is not a pure apple juice. It contains 45 ml of Apple juice and 5 ml of Orange juice.

Hence, Orange glass contains 405 ml of Orange juice and 45 ml of Apple juice. Similary, white glass contains 405 ml of Apple juice and 45 ml of Orange juice.

Jeff Altman 
The Big Game Hunter
www.TheBigGameHunter.us

JeffAltman@TheBigGameHunter.us

© 2008 all rights reserved.

Tough Interview Question #44: Do Your Socks Match?

Q: Let’s say you need to get up very early for an interview - in fact, before sunrise. You don’t want to wake your spouse, so you need to select your socks in the dark. In your drawer you have 8 red socks and 11 blue socks that are otherwise identical. What is the minimum number of socks you will need to take out of your drawer and carry into the other room to ensure you have a matching pair?


A: An oldie but goodie, this question is commonly asked and the solution is quite simple. The answer is you need to take three socks, that’s it. Two socks can be different, but a third must match one of the first two.


Jeff Altman 
The Big Game Hunter
www.TheBigGameHunter.us

JeffAltman@TheBigGameHunter.us

Tough Interview Question #43: The Macro Cube

Q: Picture a 10×10x10 “macro-cube” on the table. This big cube is made up of 1×1x1 “micro-cubes”. Your dog walks by and knocks the macro cube off with his tail, causing it to crash to the ground. When it hits, the impact causes the entire outer layer of micro-cubes to fall off. How many micro-cubes are on the floor?


A: First, don’t beat the dog, he was just happy to see you. This is a popular question and you should be ready for it. There are a couple ways to solve this. The first (not the best), is to count the number of cubes on each face and add them up. This math is confusing for most people.
The better solution is to focus on the structure of the problem. The original macro-cube and new smaller macro-cube hold the answer. The difference between their volumes is how many micro-cubes fell off. The volume of a cube is n cubed. The answer is, therefore, 10 cubed - 8 cubed. So, 1,000 - 512 = 488.

Note: A common mistake is for people to think because only one layer fell off, the solution is 10 cubed - 9 cubed.



Jeff Altman 
The Big Game Hunter
www.TheBigGameHunter.us

JeffAltman@TheBigGameHunter.us

Tough Interview Question #42: Hats and a Blind Man

Let's hear it for hedge finds to ask fun questions.

Q: Inside of a dark closet are five hats: three blue and two red. Three smart men go into the closet, and each selects a hat in the dark and places it unseen upon his head. Each man knows both that the closet contains three blue hats and two red and that the other two men have the same knowledge.

Once outside the closet, no man can see his own hat. The first man looks at the other two, thinks, and says, “I cannot tell what color my hat is.” The second man hears this, looks at the other two and says, “I too cannot tell the color of my hat.” The third man is blind. The blind man says, “Well, I know what color my hat is!”

What color is the blind man’s hat and how do you know?

A: If the first man saw the other two both wearing red hats, he would know his own hat was blue. Since he says he does not know its color, the second and third both know that between them, they are wearing both blue, or else one red and one blue.

Therefore if the second man could see a red hat on the first or third, he would know his own hat was blue.

So, when the second announces that he cannot determine his own hat color, he effectively tells the third that his hat is blue.


Jeff Altman 
The Big Game Hunter
www.TheBigGameHunter.us

JeffAltman@TheBigGameHunter.us

© 2008 all rights reserved.