Matrix A Matrix B A+B

8 4 13 14 12 8 11 5 20
5 6 3 5 12 12 6 12 17
11 8 11 14 6 5 3 12 17
9 5 15 6 7 14 11 9 16
14 4 7 3 7 4 6 5 21

A-B
Matrix C Err:502
10 16 8 5 Err:502
7 8 13 12 Err:502
16 3 7 13 Err:502
5 9 15 6 Err:502
BxC

Simultaneous equations with matrices

2x − 2y + z = 3 2 -2 1 X 3 2
3x + y − z = 7 3 1 -1 Y = 7 0
x − 3y + 2z = 0 1 -3 2 Z 0 -1
A+B C-1
12 24 19 0.012745 -0.145439 0.094711 0.075052
18 9 17 0.082132 0.062724 -0.05631 -0.071887
13 14 26 -0.050562 -0.070054 0.01641 0.146689
19 26 15 -0.007414 0.202249 -0.035485 -0.154769
8 13 8

A-B Matrix Determinant

Err:502 Err:502 Err:502
Err:502 Err:502 Err:502
Err:502 Err:502 Err:502
Err:502 Err:502 Err:502
Err:502 Err:502 Err:502
BxC
Coke and Pepsi are the only companies in country X. A soda company wants to tie up with one of these com
a higher market share eventually. Currently, Pepsi owns 55% and Coke owns 45% of market share. Following are the conclusions dr

Probability of a customer staying with the brand Pepsi over a month = 0.7
Probability of a customer switching from Pepsi to Coke over a month = 0.3
Probability of a customer staying with the brand Coke over a month = 0.9
Probability of a customer switching from Coke to Pepsi over a month = 0.1

Current State Transition Matrix One Month Two Months

Pepsi Coca Pepsi Coca Pepsi Coca Pepsi
55% 45% Pepsi 70% 30% 0.43 0.57 0.358
Coca 10% 90%
with one of these competitors. They hire a market research company to find which of the brand will have a higher
ng are the conclusions drawn out by the market research company

Two Months Steady State

Coca Pepsi Coca
0.642 25% 75%
25% 75% 100%
0% 0%
nd will have a higher
 ¨The table below provides a probability distribution for the returns on stocks A and B
State Probability Return On Return On
Stock A Stock B
1 20% 5% 50%
2 30% 10% 30%
3 30% 15% 10%
4 20% 20% -10%
Weights 0.75 0.25

The state represents the state of the economy one period in the future i.e. state 1 could represent a recession and state 2 a growth e
E[R]A = .2(5%) + .3(10%) + .3(15%) + .2(20%) = 12.5% s2p =(.75)2(.0512)2+(.25
E[R]B = .2(50%) + .3(30%) + .3(10%) + .2(-10%) = 20%
Variance A = 0.2(.05 -.125)2 + 0.3(.1 -.125)2 + 0.3(.15 -.125)2 + 0.2(.2 -.125)2 = .002625
Standard Deviation A (.002625)^0.5 = .0512 = 5.12% Stock A Stock B
VarianceB = .2(.50 -.20)2 + .3(.30 -.20)2 + .3(.10 -.20)2 + .2(-.10 - .20)2 = .042 20.00% 5.00% 50.00%
Standard Deviation B = (.042)^0.5 = .2049 = 20.49%
30.00% 10.00% 30.00%
E[Rp] = w1E[R1] + w2E[R2] 30.00% 15.00% 10.00%
E[Rp] = .50(.125) + .50(.20) = 16.25% 20.00% 20.00% -10.00%
s = (w ) s
2
p A
2 2
A + (w ) s
B
2 2
B + 2wAwBrA,B sAsB Average 12.50% 20.00%
s = (w ) s
2
p A
2 2
A + (w ) s
B
2 2
B + 2wAwB sA,B

Excess return Matrix

Stock A Stock B Stock C Stock D Stock E Stock A Stock B Stock C
1985.02 -7.00% 24.00% 28.00% -19.00% 19.00%
1985.03 -12.00% 3.00% 19.00% 18.00% 28.00%
1985.04 26.00% -6.00% -1.00% -10.00% 25.00%
1985.05 20.00% 21.00% 12.00% 0.00% 22.00%
1985.06 7.00% -12.00% -5.00% -15.00% 26.00%
1985.07 -8.00% 18.00% -10.00% 28.00% -8.00%
1985.08 -17.00% 28.00% 2.00% -15.00% -7.00%
1985.09 21.00% 26.00% 19.00% -20.00% -14.00%
1985.10 20.00% 12.00% 23.00% -18.00% 11.00%
1985.11 3.00% -6.00% -2.00% 1.00% 30.00%
1985.12 9.00% -14.00% -4.00% 25.00% 20.00%
1986.01 24.00% -19.00% -9.00% 10.00% 6.00%
1986.02 16.00% 28.00% -20.00% -15.00% -16.00%
1986.03 -5.00% 5.00% 30.00% -19.00% 12.00%
1986.04 -7.00% 30.00% 29.00% -17.00% 21.00%
1986.05 -19.00% 22.00% -17.00% 22.00% -13.00%
1986.06 -17.00% -19.00% -4.00% 30.00% 15.00%
1986.07 19.00% 20.00% -19.00% -16.00% 26.00%
1986.08 -15.00% -18.00% 30.00% 6.00% 28.00%
1986.09 19.00% 14.00% 26.00% 27.00% -20.00%
1986.10 10.00% 2.00% -20.00% 15.00% 27.00%
1986.11 -14.00% 13.00% -9.00% 16.00% 14.00%
1986.12 29.00% 0.00% -8.00% 29.00% 1.00%
1987.01 21.00% 15.00% 0.00% 13.00% 21.00%
1987.02 30.00% 30.00% 0.00% -11.00% 26.00%
1987.03 5.00% -10.00% 21.00% -12.00% 18.00%
1987.04 16.00% 14.00% -14.00% 24.00% -13.00%
1987.05 -4.00% 23.00% 27.00% 15.00% 1.00%
1987.06 -19.00% 20.00% 28.00% 27.00% -15.00%
1987.07 15.00% 1.00% 11.00% 4.00% -9.00%
1987.08 -16.00% 18.00% 4.00% -8.00% -16.00%
1987.09 10.00% 24.00% 22.00% 8.00% -7.00%
1987.10 23.00% 30.00% 7.00% 2.00% 22.00%
1987.11 -9.00% 6.00% 25.00% 12.00% 6.00%
1987.12 25.00% -14.00% -9.00% -11.00% 24.00%
1988.01 30.00% 19.00% 1.00% 13.00% -2.00%
1988.02 24.00% 5.00% -2.00% 26.00% -15.00%
1988.03 -4.00% -4.00% -15.00% -6.00% 1.00%
1988.04 29.00% 4.00% 28.00% 13.00% 22.00%
1988.05 8.00% 18.00% 13.00% 19.00% 13.00%
1988.06 28.00% 19.00% -18.00% -20.00% 12.00%
1988.07 -20.00% -20.00% -16.00% 16.00% 19.00%
1988.08 1.00% -18.00% 6.00% -2.00% 26.00%
1988.09 -2.00% 8.00% 25.00% 7.00% 8.00%
1988.10 14.00% 21.00% -2.00% 8.00% -10.00%
1988.11 -5.00% 0.00% 29.00% 15.00% 2.00%
1988.12 -12.00% -15.00% 1.00% 8.00% 29.00%
1989.01 17.00% 13.00% -5.00% -11.00% 19.00%
1989.02 22.00% -8.00% 23.00% 27.00% 29.00%
1989.03 -4.00% 23.00% -16.00% -17.00% -4.00%
1989.04 23.00% -15.00% 6.00% -4.00% 7.00%
1989.05 4.00% 21.00% -1.00% 3.00% 7.00%
1989.06 -12.00% 10.00% 16.00% 28.00% 23.00%
1989.07 2.00% 5.00% -15.00% -6.00% 26.00%
1989.08 20.00% 22.00% 30.00% 24.00% 25.00%
1989.09 20.00% 26.00% -6.00% -5.00% 1.00%
1989.10 12.00% -15.00% -1.00% -6.00% -10.00%
1989.11 -1.00% 25.00% -6.00% 1.00% 12.00%
1989.12 6.00% 4.00% 9.00% -9.00% 22.00%
1990.01 1.00% 20.00% -14.00% 20.00% 25.00%
1990.02 19.00% 23.00% 13.00% -18.00% -9.00%
1990.03 20.00% 4.00% 14.00% 5.00% 26.00%
1990.04 -8.00% 11.00% 24.00% 23.00% 7.00%
1990.05 4.00% 21.00% 7.00% -10.00% 22.00%
1990.06 21.00% -10.00% 11.00% 15.00% -13.00%
1990.07 24.00% 21.00% 7.00% 1.00% -15.00%
1990.08 30.00% -6.00% 29.00% 26.00% 15.00%
1990.09 18.00% -15.00% -17.00% 6.00% 0.00%
1990.10 9.00% 0.00% 17.00% 8.00% 26.00%
1990.11 3.00% 25.00% 30.00% 10.00% -16.00%
1990.12 13.00% 1.00% 26.00% 19.00% -14.00%
1991.01 17.00% -9.00% 22.00% 29.00% 21.00%
1991.02 -1.00% 23.00% 28.00% 15.00% 29.00%
1991.03 25.00% -19.00% 10.00% 9.00% -3.00%
1991.04 -5.00% 18.00% 12.00% 10.00% 21.00%
1991.05 6.00% 4.00% 2.00% -12.00% 7.00%
1991.06 6.00% 27.00% -5.00% 0.00% -13.00%
1991.07 -1.00% 3.00% -18.00% 23.00% -9.00%
1991.08 9.00% -19.00% 30.00% -9.00% -17.00%
1991.09 -5.00% -15.00% -6.00% 27.00% 4.00%
1991.10 -4.00% 17.00% -11.00% 20.00% -12.00%
1991.11 12.00% -12.00% 9.00% 24.00% 2.00%
1991.12 -20.00% 25.00% 17.00% 0.00% -5.00%
1992.01 13.00% 19.00% -3.00% 24.00% -16.00%
1992.02 23.00% 6.00% 2.00% 7.00% 6.00%
1992.03 -1.00% -17.00% 13.00% -5.00% -5.00%
1992.04 25.00% 16.00% 2.00% -5.00% 17.00%
1992.05 15.00% -12.00% 4.00% 29.00% -2.00%
1992.06 12.00% 12.00% 22.00% -14.00% -8.00%
1992.07 22.00% -9.00% -16.00% -13.00% -1.00%
1992.08 23.00% 10.00% -11.00% 30.00% -3.00%
1992.09 28.00% 25.00% 24.00% 4.00% 12.00%
1992.10 30.00% 24.00% 18.00% 6.00% 16.00%
1992.11 23.00% 14.00% -1.00% 29.00% -1.00%
1992.12 30.00% 1.00% 25.00% 19.00% 13.00%
1993.01 29.00% 6.00% -11.00% 10.00% 25.00%
1993.02 -11.00% -9.00% -15.00% 15.00% 19.00%
1993.03 -14.00% -4.00% -11.00% -8.00% -20.00%
1993.04 -12.00% 20.00% -1.00% -2.00% -6.00%
1993.05 -14.00% -15.00% -18.00% -10.00% 14.00%
1993.06 -17.00% -18.00% 4.00% 20.00% 0.00%
1993.07 30.00% -19.00% -9.00% 1.00% 14.00%
1993.08 -16.00% 27.00% -4.00% 15.00% 9.00%
1993.09 6.00% 3.00% -14.00% 15.00% -6.00%
1993.10 22.00% -7.00% -10.00% -6.00% 9.00%
1993.11 -16.00% 9.00% 0.00% 29.00% -5.00%
1993.12 -8.00% 17.00% -14.00% -13.00% -7.00%
1994.01 9.00% 15.00% 18.00% 22.00% 23.00%
1994.02 20.00% -12.00% -5.00% 22.00% 16.00%
1994.03 14.00% 25.00% 3.00% 14.00% 6.00%
1994.04 -17.00% -5.00% -15.00% 4.00% -13.00%
1994.05 9.00% 17.00% 30.00% -4.00% 20.00%
1994.06 8.00% -16.00% 21.00% -15.00% 14.00%
1994.07 0.00% -2.00% 30.00% 17.00% -1.00%
1994.08 1.00% 30.00% 16.00% -9.00% -13.00%
1994.09 -5.00% -5.00% 25.00% 5.00% 29.00%
1994.10 16.00% -11.00% -10.00% -16.00% -5.00%
1994.11 -13.00% 14.00% -19.00% 21.00% -8.00%
1994.12 -13.00% 29.00% -10.00% 18.00% 17.00%
1995.01 -5.00% 22.00% 15.00% 28.00% -19.00%
1995.02 26.00% 16.00% 5.00% -5.00% 24.00%
1995.03 2.00% -19.00% -11.00% -13.00% -6.00%
1995.04 -7.00% 20.00% -11.00% 26.00% -17.00%
1995.05 -7.00% 5.00% -17.00% -19.00% -20.00%
1995.06 -5.00% 18.00% 20.00% 1.00% 27.00%
1995.07 16.00% 17.00% 29.00% 0.00% 16.00%
1995.08 5.00% 19.00% 29.00% -1.00% -17.00%
1995.09 2.00% -8.00% -7.00% -1.00% -17.00%
1995.10 -9.00% 27.00% 28.00% 6.00% 12.00%
1995.11 15.00% 16.00% -6.00% -20.00% 27.00%
1995.12 20.00% 15.00% 25.00% 23.00% 21.00%
1996.01 24.00% -8.00% 19.00% 29.00% -10.00%
1996.02 -14.00% 5.00% 20.00% -9.00% -20.00%
1996.03 21.00% 3.00% 4.00% 20.00% -13.00%
1996.04 23.00% 11.00% 29.00% -5.00% -11.00%
1996.05 16.00% -10.00% 11.00% 0.00% -9.00%
1996.06 11.00% -5.00% 12.00% -4.00% 27.00%
1996.07 25.00% -5.00% 20.00% -17.00% 1.00%
1996.08 -12.00% -15.00% -11.00% -13.00% 26.00%
1996.09 7.00% 0.00% 11.00% -17.00% 25.00%
1996.10 -13.00% 10.00% 9.00% 1.00% -3.00%
1996.11 -16.00% 2.00% -3.00% 6.00% 10.00%
1996.12 14.00% 12.00% -12.00% 0.00% 3.00%
1997.01 3.00% 2.00% 13.00% 4.00% -6.00%
1997.02 -12.00% 0.00% -14.00% 3.00% -9.00%
1997.03 -18.00% 8.00% -6.00% 2.00% -3.00%
1997.04 13.00% -9.00% -6.00% -2.00% 13.00%
1997.05 13.00% -7.00% 12.00% 7.00% -4.00%
1997.06 14.00% 6.00% -7.00% 8.00% -5.00%
1997.07 -2.00% 11.00% -7.00% 2.00% 6.00%
1997.08 2.00% 1.00% 1.00% 9.00% 20.00%
1997.09 -2.00% 9.00% 1.00% 8.00% -2.00%
1997.10 18.00% 20.00% -1.00% 15.00% 3.00%
1997.11 18.00% 5.00% 8.00% 5.00% 11.00%
1997.12 12.00% 4.00% 14.00% 10.00% 12.00%
1998.01 14.00% 9.00% 13.00% 9.00% 15.00%
1998.02 28.00% -14.00% -7.00% 18.00% 18.00%
1998.03 22.00% 12.00% 19.00% 6.00% 7.00%
1998.04 -2.00% 3.00% 20.00% 15.00% 20.00%
1998.05 1.00% 12.00% 2.00% 1.00% 4.00%
1998.06 6.00% -1.00% 0.00% 17.00% -4.00%
1998.07 -13.00% 10.00% 14.00% 24.00% -10.00%
1998.08 10.00% -5.00% -13.00% 3.00% -7.00%
1998.09 4.00% 24.00% 21.00% 27.00% 24.00%
1998.10 9.00% 8.00% -9.00% 25.00% -19.00%
1998.11 3.00% -10.00% -5.00% -13.00% 6.00%
1998.12 -6.00% -4.00% -2.00% -17.00% -16.00%
1999.01 -18.00% 18.00% 12.00% -3.00% -2.00%
1999.02 14.00% 21.00% 21.00% 15.00% 17.00%
1999.03 -11.00% -4.00% 27.00% -10.00% -3.00%
1999.04 -9.00% 14.00% -8.00% -15.00% -3.00%
1999.05 26.00% -19.00% -19.00% 8.00% -4.00%
1999.06 -14.00% -4.00% -17.00% 12.00% -3.00%
1999.07 -7.00% -2.00% -5.00% 16.00% 25.00%
1999.08 -10.00% 30.00% 2.00% 17.00% 6.00%
1999.09 -11.00% -2.00% 17.00% -18.00% 13.00%
1999.10 22.00% 0.00% 12.00% 6.00% 17.00%
1999.11 23.00% -4.00% 21.00% -1.00% 16.00%
1999.12 20.00% 25.00% 20.00% -2.00% -14.00%
2000.01 4.00% 11.00% -9.00% -15.00% 27.00%
2000.02 23.00% -17.00% 2.00% 12.00% 25.00%
2000.03 -12.00% -5.00% 28.00% -10.00% -13.00%
2000.04 -10.00% -19.00% -4.00% -14.00% -15.00%
2000.05 -13.00% 0.00% 23.00% -4.00% 4.00%
2000.06 12.00% 11.00% -14.00% -11.00% -17.00%
2000.07 15.00% -4.00% -15.00% 8.00% 15.00%
2000.08 -6.00% 4.00% 9.00% -11.00% 4.00%
2000.09 17.00% 26.00% 22.00% 3.00% -2.00%
2000.10 -6.00% 3.00% 17.00% 13.00% -10.00%
2000.11 24.00% 18.00% -6.00% 0.00% -10.00%
2000.12 -8.00% 19.00% 29.00% -1.00% -4.00%
2001.01 18.00% -2.00% 7.00% 22.00% -10.00%
2001.02 18.00% -3.00% 24.00% 21.00% 21.00%
2001.03 -3.00% 0.00% 22.00% 1.00% 3.00%
2001.04 3.00% 11.00% -10.00% 5.00% 23.00%
2001.05 -6.00% 10.00% 26.00% 19.00% 4.00%
2001.06 4.00% 12.00% 15.00% -10.00% 30.00%
2001.07 4.00% -3.00% 10.00% 29.00% 12.00%
2001.08 19.00% 29.00% 15.00% 7.00% 14.00%
2001.09 30.00% 8.00% 27.00% 8.00% -10.00%
2001.10 22.00% 23.00% 0.00% 24.00% 15.00%
2001.11 19.00% -3.00% 2.00% 27.00% 10.00%
2001.12 5.00% 29.00% -4.00% 28.00% -4.00%
2002.01 8.00% 3.00% 14.00% 18.00% -8.00%
2002.02 5.00% 15.00% 21.00% 14.00% -6.00%
2002.03 2.00% 11.00% 4.00% 0.00% 9.00%
2002.04 30.00% 11.00% -3.00% -1.00% 24.00%
2002.05 11.00% 0.00% -6.00% 20.00% 26.00%
2002.06 10.00% 8.00% 11.00% 23.00% 10.00%
2002.07 25.00% 2.00% 12.00% 3.00% -6.00%
2002.08 -4.00% 4.00% 24.00% 6.00% 1.00%
2002.09 -4.00% 2.00% -8.00% 27.00% -2.00%
2002.10 25.00% -4.00% -18.00% 14.00% -14.00%
2002.11 19.00% -6.00% 15.00% -5.00% -18.00%
2002.12 26.00% -9.00% 27.00% 22.00% 0.00%
2003.01 14.00% -7.00% 10.00% 10.00% -19.00%
2003.02 -3.00% -16.00% -18.00% 30.00% 21.00%
2003.03 22.00% -13.00% -13.00% -5.00% 15.00%
2003.04 19.00% 12.00% 13.00% -20.00% 18.00%
2003.05 27.00% 20.00% 14.00% 0.00% 16.00%
2003.06 26.00% 17.00% 0.00% -8.00% 22.00%
2003.07 0.00% 16.00% 0.00% -11.00% 4.00%
2003.08 -4.00% -11.00% 14.00% 11.00% 11.00%
2003.09 23.00% 11.00% 22.00% 28.00% -13.00%
2003.10 -10.00% 15.00% -20.00% 3.00% -13.00%
2003.11 -12.00% 21.00% 30.00% -20.00% -18.00%
2003.12 -3.00% 13.00% -20.00% -1.00% -16.00%
2004.01 8.00% 9.00% 19.00% 2.00% -2.00%
2004.02 14.00% -17.00% 24.00% 26.00% 20.00%
2004.03 -6.00% -14.00% 9.00% 3.00% 27.00%
2004.04 5.00% 4.00% -14.00% 29.00% 25.00%
2004.05 12.00% -15.00% -15.00% 6.00% -18.00%
2004.06 -16.00% 25.00% 16.00% 6.00% -18.00%
2004.07 20.00% 11.00% 22.00% 24.00% 10.00%
2004.08 11.00% 2.00% 16.00% -13.00% 3.00%
2004.09 25.00% -11.00% -11.00% -12.00% 7.00%
2004.10 0.00% -1.00% -5.00% 16.00% 7.00%
2004.11 13.00% -11.00% 26.00% -17.00% 18.00%
2004.12 -12.00% -5.00% 12.00% -20.00% 14.00%
2005.01 29.00% -7.00% 14.00% 9.00% -14.00%
2005.02 15.00% -6.00% -12.00% 21.00% -5.00%
2005.03 8.00% 10.00% -8.00% -4.00% -17.00%
2005.04 10.00% -15.00% 18.00% 11.00% 14.00%
2005.05 26.00% -17.00% 30.00% -18.00% 8.00%
2005.06 14.00% 14.00% 0.00% 25.00% -1.00%
2005.07 26.00% 5.00% 5.00% 10.00% 23.00%
2005.08 -1.00% 30.00% -14.00% -16.00% 11.00%
2005.09 -12.00% 25.00% 14.00% -10.00% -7.00%
2005.10 -4.00% 7.00% 13.00% -1.00% 29.00%
2005.11 -2.00% 21.00% -2.00% 3.00% 6.00%
2005.12 -5.00% -20.00% -17.00% 6.00% -17.00%
2006.01 -7.00% -12.00% 3.00% -14.00% 28.00%
 2006.02 7.00% -20.00% 13.00% 23.00% -4.00%
2006.03 25.00% 8.00% 17.00% -5.00% 30.00%
2006.04 8.00% -7.00% -14.00% -19.00% 15.00%
2006.05 28.00% 7.00% -2.00% 0.00% -18.00%
2006.06 22.00% -10.00% -15.00% -1.00% 11.00%
2006.07 -13.00% 11.00% -1.00% 1.00% 8.00%
2006.08 -18.00% -13.00% 14.00% 19.00% 18.00%
2006.09 25.00% 12.00% 23.00% -11.00% 25.00%
2006.10 26.00% 0.00% -2.00% 4.00% 4.00%
2006.11 8.00% 17.00% -5.00% 13.00% 8.00%
2006.12 -7.00% -14.00% -19.00% -15.00% -15.00%
2007.01 7.00% -2.00% 0.00% -8.00% -3.00% Stock A
2007.02 -10.00% -15.00% -1.00% -4.00% 5.00% Stock B
2007.03 11.00% -1.00% 1.00% 25.00% 23.00% Stock C
2007.04 -15.00% -1.00% 24.00% 13.00% -18.00% Stock D
2007.05 -1.00% 1.00% 17.00% -7.00% 15.00% Stock E
2007.06 17.00% 4.00% 9.00% 21.00% -7.00%
2007.07 7.00% 9.00% 7.00% 19.00% 15.00%
2007.08 10.00% 22.00% 25.00% 13.00% 6.00%
2007.09 21.00% 18.00% 14.00% 9.00% 13.00%
2007.10 -15.00% 9.00% 28.00% -14.00% -7.00%
2007.11 29.00% 14.00% 22.00% 12.00% 19.00% Stock A
2017.12 -9.00% 17.00% 14.00% 18.00% 5.00% Stock B
Stock C
Expected Return 6.91% 5.31% 5.81% 5.31% 5.32% 5.69% Stock D
Variance 0.020247 0.01913 0.022029 0.020423 0.021321 Stock E
SD Stock A Stock B
weights A B C D E Stock A 0.020247 -0.000732
19% 25% 14% 22% 20% 1 Stock B -0.000732 0.01913
Expected Returns Stock C 0.000956 0.002897
Stock D 0.000856 -0.000364
Stock E 0.002749 -0.001567

0.004573
cession and state 2 a growth economy. The probability reflects how likely it is that the state will occur. The sum of the probabilities must equal 1
s2p =(.75)2(.0512)2+(.25)2(.2049)2+2(.75)(.25)(-1)(.0512)(.2049)= .00016

Excess Returns Transition Matrix multiplied by Probabilities

Stock A Stock B
-7.50% 30.00% -1.50% 6.00% 0.002625
-2.50% 10.00% -0.75% 3.00% -0.0105
2.50% -10.00% 0.75% -3.00% #N/A
7.50% -30.00% 1.50% -6.00%
0.000164

Excess return Matrix

Stock D Stock E
Stock A Stock B Stock C Stock D Stock E
0.020247
-0.000732 0.01913
0.000956 0.002897 0.022029
0.000856 -0.000364 0.000622 0.020423
0.002749 -0.001567 0.00192 -0.00045 0.0213212641322314

Stock A Stock B Stock C Stock D Stock E

0.020247
-0.000732 0.01913
0.000956 0.002897 0.022029
0.000856 -0.000364 0.000622 0.020423
0.002749 -0.001567 0.00192 -0.00045 0.0213212641322314
Stock C Stock D Stock E
0.000956 0.000856 0.002749
0.002897 -0.000364 -0.001567
0.022029 0.000622 0.00192
0.000622 0.020423 -0.00045
0.00192 -0.00045 0.021321
probabilities must equal 100%. The last two columns present the returns or outcomes for stocks A and B that will occur in each of the four stat

-0.0105
0.042
#N/A
ill occur in each of the four states