A Markov Chain Has Transition Matrix and Initial-Probability Vector

question 117

Multiple Choice

A Markov chain has transition matrix and initial-probability vector . Find the probability vector for the third stage of the Markov chain. ​

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Definitions:

Foreign-Exchange Reserves

Stockpiles of foreign currencies maintained by a nation’s central bank. Obtained when the central bank sells local currency in exchange for foreign currency in the foreign exchange market.

Terms of Trade

This refers to the ratio at which a country's exports are exchanged for its imports, influencing the country's economic health.

Real Interest Rates

The interest rate adjusted for inflation, representing the true cost of borrowing and the real yield to lenders.

British Pound

The United Kingdom's currency, a major global currency involved in international trading.