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To assess the financial stability of a company, we consider the hazard rate, which is the rate at which a company is expected to default or go bankrupt. In this scenario, the hazard rate is a constant 0.12 per year. Calculate the probability that the company will continue to be operational throughout the first year and subsequently declare bankruptcy before the end of the second year.
A
8.9%
B
10.0%
C
11.3%
D
21.3%