This is a Markov Analysis question similar to my questions in Lesson 14.
In part (a), trust their notation. By X(2), they mean after 2 time periods even though they say the "third observation
period." The first is X(0), the initial state; the second is X(1), and so, the third is X(2).
Part (b):
When you are finding the steady-state or stable vector, don't worry about the little tricks I use. Set up the augmented matrix with a row of ones all the way through the first row, then the rest of the augmented matrix is I - T for the coefficients augmented with a column of zeros. In other words, do Step 1 as I
outline at the start of Lesson 14. At that point, merely row-reduce the way you always do. Don't worry about the fancy tricks I show about making zero rows and stuff. Row-reduce like usual, and the system will solve itself. I really regret over-complicating this lesson by giving too many tricks when it is ultimately just a row-reduction problem.
DO NOT USE THE CRAMER'S RULE METHOD I DEMONSTRATE! Obviously, since
that isn't even taught until later in the course (Lesson 8 in my book). Even after you do learn Lesson 8, do not use this approach to solve Markov. Unnecessary. Stick to good old row-reduction.