# Question: Consider a firm with an F rating a What is the

Consider a firm with an F rating.

a. What is the probability that after 4 years it will still have an F rating?

b. What is the probability that after 4 years it will have an FF or FFF rating?

c. From examining the transition matrix, are firms tending over time to become rated more or less highly? Why?

a. What is the probability that after 4 years it will still have an F rating?

b. What is the probability that after 4 years it will have an FF or FFF rating?

c. From examining the transition matrix, are firms tending over time to become rated more or less highly? Why?

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