The probability that a car owner will become a car renter in five years is 0.03. The probability that a
renter will become an owner in five years is 0.1. Suppose the proportions in the population are 64%
owners (O), 35.5% renters (R) and .5% neither (N) with the following transition matrix.
O R N
O
R
N
0.94 0.06 0
0.12 0.879 0.001
032 0.68
Find the long–range probabilities for the three categories.
A trailer rental company has rental and return facilities at both a north and south location in a city.
Assume a trailer must be returned to one or the other of these locations. If a trailer is rented at the
north location, the probability that it will be returned there is .6; if a trailer is rented at the south
location, the probability it will be returned there is .65. Assume the company rents all of its trailers
each day and each trailer is rented (and returned) only once a day. If the company starts with 50%
of the trailers at each location, what is the expected distribution (in percentages) the next day?
52.5% of the trailers at the north location; 47.5% of the trailers at the south location
62.5% of the trailers at the north location; 37.5% of the trailers at the south location
37.5% of the trailers at the north location; 62.5% of the trailers at the south location
47.5% of the trailers at the north location; 52.5% of the trailers at the south location
Given the transition matrix:
A B C D A B C D
P =
A
B
C
D
0.4 0.3 0.2 0.1
0 1 0 0
0 0 1 0
0.2 0.5 0.1 0.2
P4=
A
B
C
D
0.0396 0.5942 0.3518 0.0144
0 1 0 0
0 0 1 0
0.0288 0.756 0.2044 0.0108
Find the probability of going from state D to state A in four trials.