FE610 Hw2 2010A
Question 1
Markov Chain
1) On a given day, a retired English professor, Dr. Fish, amuses himself with only one of the
following activities: reading (activity 1), gardening (activity 2), or working on his book about a
river valley (activity 3). For 1 ≤ i ≤ 3, let Xn=i if Dr. Fish devotes day n on activity i. Suppose that
1,2, …} is a Markov chain, and depending on which of these activities he chooses on a
certain day, the probability of engagement in any one of the activities on the next day is given
by the transition probability matrix:
0.3 0.25 0.45
0.4 0.1 0.5
0.25 0.4 0.35
Find the proportion of days Dr. Fish devotes to each activities.
[Hint: Solve for the equilibrium of transition matrix]
Written Assignment –reading response
Due: Case Study/Writing Assignment Due: on Nov 17 at 2:00 pm
3-page essay document, where you critically discuss the author’s view of the role of
finance and business practices as a driver of Corporate Social Responsibility, the
document should be typed in 12-font size, 1 ½ spacing, and reference-page should be
included. Reference-page does not count as a part of the 3-page requirement.
The document should not be shorter than 3 pages or your assignment will be penalized
for this.
The reference-page must include 3 additional academic references: books, journal
articles, (references from internet are not accepted). Electronic assignment won’t be
accepted.
Journal Article to discuss:
Scholtens, Bert., (2006) Finance as a Driver of Corporate Social Responsibility. Journal
of Business Ethics. 68, 19-33
Trent has online subscription.