A
Aditya jain
Member
How is the model markov chain?
Suppose one is at 40% level, and he makes a claim we'll need to know about the previous claim history (whether he made a claim previously or not) to tell whether he will be at 0% level or 25% level.
On the other hand if one is at 60% level and he makes a claim he will immediately be demoted to 40% level and then if he again makes a claim he will be moved to 0% level. So the probability of going from 60% to 25% should be 0 right?
Suppose one is at 40% level, and he makes a claim we'll need to know about the previous claim history (whether he made a claim previously or not) to tell whether he will be at 0% level or 25% level.
On the other hand if one is at 60% level and he makes a claim he will immediately be demoted to 40% level and then if he again makes a claim he will be moved to 0% level. So the probability of going from 60% to 25% should be 0 right?