Poisson thinning: exactly two large orders
Orders hit your book as a Poisson process averaging per hour. Independently, each order is "large" with probability and "small" otherwise. What is the probability of exactly 2 large orders in an hour? Give a decimal to four places.
Show hints (2)+
- Thinning a Poisson stream gives a Poisson stream with rate .
- Then evaluate the pmf at with rate .
Answer
Reveal answer →Final answer
0.224 (± 0.001)
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Interview format: Hedge Fund Quant, Numerical Reasoning Tests