Table 14-6 The Following Data Consists of a Matrix of Transition Probabilities

question 55

Multiple Choice

Table 14-6
The following data consists of a matrix of transition probabilities (P) of four majors in the College of Business, and the initial proportion of students in each major π(0) .Assume that each state represents a major and the transition probabilities represent changes from one major to the next after taking the introductory class in each discipline.
P =

π(0) = (.4, .3, .2, .1)
-Using the data in Table 14-6, determine Major 4's estimated popularity after students have taken the first two introductory courses.

• A)0.232
• B)0.220
• C)0.356
• D)0.191

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Definitions:

Co-insurance Clause

A provision in an insurance policy requiring the policyholder to bear a portion of the losses to the extent of a specified percentage.

Fireproof

A characteristic of materials or structures that are resistant to fire and are able to withstand high temperatures without catching fire or sustaining significant damage.

Insured

A person or entity covered by an insurance policy receiving financial protection or reimbursement against losses from an insurance company.

Misrepresentation

A false statement of fact made by one party to another, which has the effect of inducing that party into a contract.