Question: Matrix Bank has compiled the following migration matrix on consumer loans. Which of the following statements accurately summarizes this data? Risk of the grade at

Matrix Bank has compiled the following migration matrix on consumer loans.

Matrix Bank has compiled the following migration matrix on consumer loans. Which of the following statements accurately summarizes this data? Risk of the grade at End of Year 1 2 3 Risk grade at the 1 0.88 0.08 0.02 0.02 eginning of the year 2 0.1 0.84 0.03 0.03 3 0.02 0.09 0.78 0.11 a. Grade one loans have a higher probability of downgrade than grades two or three b. Grade three loans have a lower probability of upgrade than grade two loans c. Grade three loans have a higher probability of downgrade than grade two loans d. Both option A and option C e. All of option A, option B and option C

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