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The following table presents the transition probabilities of credit ratings: What is the probability that a company initially rated C will default in year 2?

  1. The following table presents the transition probabilities of credit ratings:

    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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