Arrivals before the rival stream

Two independent Poisson processes run side by side: stream AA at rate λA=1\lambda_A = 1 per minute and stream BB at rate λB=2\lambda_B = 2 per minute. Watching from time zero, what is the expected number of AA-arrivals that occur before the very first BB-arrival? (to 3 decimals)

Show hints (2)+
  1. Merge the streams: each event is independently an AA with probability λA/(λA+λB)\lambda_A/(\lambda_A+\lambda_B).
  2. "Number of AA's before the first BB" is geometric; its mean is p/(1−p)p/(1-p).

Answer

Reveal answer →

0.5 (± 0.001)

Create a free account to see the full worked solution and track your progress.

Interview format: Prop Trading, Systematic & Data-Driven Trading

Related questions