Consider two firms, one with an FF rating and one with an FFF rating. What is the probability that after 4 years each will have retained its rating? What is the probability that each will have moved to one of the other two ratings?
Suppose there are three credit ratings, F (first-rate), FF (future failure?), and FFF (fading, forlorn, and forsaken). The transition matrix between ratings looks like this:

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Rating to: Rating from F FF FFF 0.9 0.07 0.03 0.15 0.80 0.05 0.10 0.30 0.6