### The Token question - my last post on McKinsey

I promised the answer to the Token question I had for the McK interview.First you need to clarify the boundaries of the problem. You choose to either stock up tokens before the increase, or not. Stocking up depends on whether you're better of over 3 years, and if you want to maximise the payoff, you need to estimate the optimal duration.

Then, you need to assume lots of things in order to simplify the problem and "lock" some variables:

- no further increase of price over 3 years at least

- 2 tokens a day every day (constant demand is key)

- risk-free rate of 5% annually.

A simple comparison over 1 year tells you that if you invest in 1 token, your payoff will be 1.1 end of the year, to 1.05 for a placement. So it must be more than one year. Over 2 years, the payoff becomes 1.1 to 1.05^2 ie. 1.1025, so it must be less that 2 years. To estimate the "less", you compare .0025 or 0.25% to 5%, it gives 18 days or so... So the optimal duration is 2 years minus 18 days, and you should buy tokens now for your use over that period.

My theory about the Office recruitment strategy was fully validated. Roughly 25 INSEADs interviewed, only 1 accepted (from one of that country's top 3 schools). Now I know that 2 or 3 current MBAs max are sponsored, all from these schools. If you really want to go to McK with more probability of success, this year's success story is Dubai, which hired quite a few people.

Yesterday was Ibiza party, it was gigantic. I loved it. Although I'm a bit on a hangover now... Today is BBQ again.

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