This informant is a senior at USC in the Marshall School of Business.  He told me he had a riddle for me that he was asked in an interview for consulting, but then later said it could have been an investment banking interview as well he didn’t remember.

Out in the middle of the ocean there exists a magical island with only grass.  There are 120 wolves and 1 sheep on the island.  The wolves can live off the grass but they would rather eat sheep.  Every time a sheep is eaten that wolf turns into a sheep.  Now the wolf has to worry about being eaten by another wolf.  All the wolves are rational and smart and want to survive.  Given that there are 120 wolves and 1 sheep on the island, will the sheep be eaten?

The answer is: No the sheep will not be eaten.  This can be shown much simpler with smaller numbers.  If there is 1 wolf and 1 sheep the sheep will be eaten.  If there is 2 wolves and 1 sheep the sheep won’t be eaten, because each one knows the other will eat him right after.  So with this reasoning, whenever there is an even number of wolves on the island, the sheep won’t get eaten.

I definitely didn’t know the answer off the top of my head, but once I heard the answer it seemed like a pretty simple concept.  This shows how much people working in high finance value critical thinking and problem solving skills.