Private Equity Interview Question - Part 1

Welcome to S1E3 installment for community members!

This week we’re going to take a look at a question from a data scientist case study for a job at a private equity firm. How would you go about solving this? What is the thought process that you’re applying for this answer? What is the best way to deliver this answer?

Here’s the question:

There exists an index known as the Beracha, Hardin & Johnson Buy vs Rent index to signal whether current market conditions favor buying or renting a home in terms of wealth creation over a fixed holding period. The index is currently publicly available and covers the USA and a select few metros in the United States. (*)