The term 'transition matrix' refers to a matrix that provides a measurement of the probability of a loan:
A)being upgraded over some period
B)being downgraded over some period
C)defaulting over some period
D)All of the listed options are correct.

Question

Quizplus · Accepted Answer

A transition matrix provides probabilities for all of the listed options, including the probability of a loan being upgraded, downgraded, or defaulting over a specific period. Therefore, D is the correct answer.

The Term 'Transition Matrix' Refers to a Matrix That Provides