You are given that a particular policyholders 14-year discount history is 1, 2, 1, 2, 3, 2,
Question:
You are given that a particular policyholder’s 14-year discount history is 1, 2, 1, 2, 3, 2, 3, 3, 2, 1, 1, 1, 2, 3 where the number refers to a particular discount state, as defined above. Determine the probability that the policyholder will be in the following states at t = 15.
a. State 1
b. State 2
c. State 3
Is the process Markov?
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Step by Step Answer:
The policyholder is able to move down only one state from his current state X ...View the full answer
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Related Book For 
Introduction To Actuarial And Financial Mathematical Methods
ISBN: 9780128001561
1st Edition
Authors: Stephen Garrett
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