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    Escuadro PS3

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    Aaron Huang
    1) The matrix is stochastic if the entries in each row are non-negative and sum to 1. Matrix a) and c) are stochastic while b) is not since it is not square. 2) A stochastic matrix can be written to correspond to a transition diagram showing the probabilities of moving between states. 3) A transition diagram showing the probabilities of moving between states can be drawn and represented as a stochastic matrix.

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    Escuadro PS3

    Uploaded by

    Aaron Huang
    121 views2 pages
    1) The matrix is stochastic if the entries in each row are non-negative and sum to 1. Matrix a) and c) are stochastic while b) is not since it is not square. 2) A stochastic matrix can be written to correspond to a transition diagram showing the probabilities of moving between states. 3) A transition diagram showing the probabilities of moving between states can be drawn and represented as a stochastic matrix.

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    financial mathematics problem set

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    ESCUADRO_PS3

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    1) The matrix is stochastic if the entries in each row are non-negative and sum to 1. Matrix a) and c) are stochastic while b) is not since it is not square. 2) A stochastic matrix can be written to correspond to a transition diagram showing the probabilities of moving between states. 3) A transition diagram showing the probabilities of moving between states can be drawn and represented as a stochastic matrix.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    121 views2 pages

    Escuadro PS3

    Uploaded by

    Aaron Huang
    1) The matrix is stochastic if the entries in each row are non-negative and sum to 1. Matrix a) and c) are stochastic while b) is not since it is not square. 2) A stochastic matrix can be written to correspond to a transition diagram showing the probabilities of moving between states. 3) A transition diagram showing the probabilities of moving between states can be drawn and represented as a stochastic matrix.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    ESCUADRO, Krisha Anne K31

    FINAMAT
    Problem Set 3

    General Instruction: Solve the items with complete solution. If necessary, encircle or box the
    final answer.

    1) Determine whether the matrix is stochastic or not.


    1 0.8
    a) ! ' YES
    0 0.2

    b) !0.4 0.3 0.2' NO, even though each column is equal to 1 and the entries are ≥ 0,
    0.6 0.7 0.8
    the matrix is not square.

    1/6 5/12 0
    c) *1/2 1/4 0.5. YES
    1/3 1/3 0.5

    2) Write a stochastic matrix corresponding to the transition diagram.

    A B C
    A 1/3 2/9 1/3
    B /1/3 4/9 1/61
    C 1/3 1/3 1/2
    3) Draw a transition diagram corresponding to the stochastic matrix.

    0 0.2 0.5
    4) Is /0.5 0 0.5 1 a regular stochastic matrix? Explain.
    0.5 0.8 0
    YES, it is a regular stochastic matrix since all the entries of at least one particular
    power are positive and non-zero.

    1 0.4 0
    5) Is /0 0.2 0.1 1 an absorbing stochastic matrix? Explain.
    0 0.4 0.9
    YES, it is an absorbing stochastic matrix. It has an absorbing state on entry a11, and
    from any non-absorbing state, it is possible to move to this absorbing state. The entry on
    a12 can transition to the absorbing state in a11 with the value of 0.4.

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