Question 1 through Question 4 are based on the information on current spot and forward term structures (assume the corporate debt pays interest annually) in Table 1: Table 1. Term Structure of treasury bills/bonds and BBB corporate debt Spot 1 Year Spot 2 Year (1-year maturity) forward 1-year 2.75 percent 5.25 percent X Treasury BBB Corporate Debt 5.25 percent 8.75 percent Y Using the term structure of default probabilities, what is the implied default probability for BBB corporate debt during the second year? A) 4.06% B) 3.33% C) 96.68% D) 5.25% E) 95.94%