Question: Problem 1 . Consider the Bonus - Malus system with 5 client tiers, from 1 to 5 . Each client has Poisson number of accidents

Problem 1. Consider the Bonus-Malus system with 5 client tiers, from 1 to 5. Each client has Poisson number of accidents with mean equal to the number of the tier. If a client from tier N has greater/less than N accidents, this client is moved to tier N +1/N -1. Write the transition matrix.

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