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QUESTION 23 The following table presents the transition probabilities of credit ratings: Starting State EndingStateTotal probabilityABCDA0.970.030.000.001.00B0.020.930.020.031.00C0.010.120.640.231.00D0001.001.00 What is the probability that a company initially rated

QUESTION 23

The following table presents the transition probabilities of credit ratings:
Starting StateEndingStateTotal probabilityABCDA0.970.030.000.001.00B0.020.930.020.031.00C0.010.120.640.231.00D0001.001.00
What is the probability that a company initially rated C will default in year 2?Exclude the case where the company defaults in year 1.
0.23
0.1472
0.1508
0.87

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