The following table is one-year ratings transition matrix. Given a bonds rating now, the matrix gives the probability associated with the bond having a given rating in a years time. For example, a bond that starts the year with an A rating has a 90% chance of maintaining that rating and an 8% chance of migrating to a B rating. Given a B-rated bond, what is the probability that the bond defaults (D rating) over 1 year? What is the probability that the bond defaults over 2 years?

			To a rating of:
		A	B	C	D
	A	90%	8%	2%	0%
Rating of:	B	10%	80%	8%	2%
	C	0%	25%	60%	15%
	D	0%	0%	0%	100%