Transition probabilities, Managerial Accounting

Transition probabilities

These are the probabilities of moving from one state to another in the next time period. Usually they are written in the form of a probability matrix.

Example:

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Sum of probabilities in any row equals one    OR

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Sum of probabilities in any column equals one

 

Posted Date: 12/8/2012 4:40:34 AM | Location : United States







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