Each year, a family always goes on its holiday to one of three places; Portland (P), Quambatook (Q) or
Rochester (R).
They never go to the same place two years in a row. For example, if they went to Portland one year, they would
not go to Portland the next year; they would go to Quambatook or Rochester instead.
A transition matrix that can be used to model this situation is
Main thing you should be looking at is: "if they went to Portland one year, they would not go to Portland the next year; they would go to Quambatook or Rochester instead"
You now know that a 0 will signify that they aren't travelling there in the next year. The rest of the information is irrelevent, as long as the sum equals 1.
That leaves two possible answers:
D) 
E) 
Now remember that in Transition Matrices, the sum of each column must equal "1".
In matrix D, column 1 (0.3 + 0.5) = 0.8, Column 2 (0.2 + 0.6) = 0.8 and Column 3 (0.8 + 0) = 0.8, none equal 1, therefore it cannot be an appropriate Transition Matrix.
In Matrix E, column 1 (0.5 + 0.5) = 1, column 2 (0 + 1) = 1, column 3 (0.1 + 0.9) = 1
The answer must be E
Hope that helps man :)