17-3. Cyert and Associates (1963). Bankl offers loans which are either paid when due or are delayed. If the payment on a loan is delayed by more than 4 quarters (1 year), Bank1 considers the loan a bad debt and writes it off. The following table provides a sample of Bankl's past experience with loans. Loan amount $20,000 $50,000 Quarters late Payment history 0 $2000 paid $3000 delayed by an extra quarter, $3000 delayed by 2 extra quarters, and the rest delayed 3 extra quarters. $4000 paid $12,000 delayed by an extra quarter, $6000 delayed by 2 extra quarters, and the rest delayed by 3 extra quarters. 2 $7500 paid $15,000 delayed by an extra quarter, and the rest delayed by 2 extra quarters. 3 $42,000 paid and the rest delayed by an extra quarter. 4 $50,000 paid. $75,000 $84.000 $200,000 Express Bankl's loan situation as a Markov chain. 17-3. Cyert and Associates (1963). Bankl offers loans which are either paid when due or are delayed. If the payment on a loan is delayed by more than 4 quarters (1 year), Bank1 considers the loan a bad debt and writes it off. The following table provides a sample of Bankl's past experience with loans. Loan amount $20,000 $50,000 Quarters late Payment history 0 $2000 paid $3000 delayed by an extra quarter, $3000 delayed by 2 extra quarters, and the rest delayed 3 extra quarters. $4000 paid $12,000 delayed by an extra quarter, $6000 delayed by 2 extra quarters, and the rest delayed by 3 extra quarters. 2 $7500 paid $15,000 delayed by an extra quarter, and the rest delayed by 2 extra quarters. 3 $42,000 paid and the rest delayed by an extra quarter. 4 $50,000 paid. $75,000 $84.000 $200,000 Express Bankl's loan situation as a Markov chain