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.

		a. 0.23
		b. 0.1472
		c. 0.1508
		d. 0.87

Starting State Total probability A B D 0.97 0.02 0.01 0 Ending B 0.03 0.93 0.12 0 State 0.00 0.02 0.64 0 D 0.00 0.03 0.23 1.00 1.00 1.00 1.00 1.00