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Compute Perplexity of a Language Model is a easy coding interview question covering nlp, machine learning, math — the kind asked at FAANG (Facebook/Meta, Apple, Amazon, Netflix, Google) and AI-first companies like Anthropic, OpenAI, and Nvidia.
You are given the probability a language model assigned to each actual next token in a held-out test sequence. Compute the model's perplexity. Explain why the computation must be done in log space and what the resulting number means.
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