Calculate the probability that an investment-grade bond


The annual credit migration table of a group of bonds is given below:

Allt\t+ 1 Investment Speculative Default

Investment 0.93 0.06 0.01

Speculative 0.02 0.86 0.12

Default 0 0 0

Calculate the probability that an investment-grade bond from the group will default any time within three years from now.

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Financial Management: Calculate the probability that an investment-grade bond
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