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SOLVED:A transport firm has effected an insurance contract for a fleet of vehicles. The premium payment is due at the beginning of each year. There are four possible premium classes with a premium payment of Pi in class i, where Pi 1ri for all i. If the current premium class is i, then the firm claims at the end of the year only damages larger than ; otherwise, nothing is claimed. Use an appropriate Markov chain to find the long-run average yearly cost.
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