Measuring Credit Risk of a Corporate Bond

An investor is assessing a corporate bond with a credit rating of BB, which is classified as speculative or non-investment grade. The investor is particularly concerned about the risks associated with this bond due to possible economic downturns and company-specific issues. Additionally, the bond's yield is considerably higher than that of similarly rated bonds in the market. As part of the credit analysis, the investor wants to determine the appropriate measure for quantifying the default risk associated with this bond.

Which of the following options provides the best measurement of credit risk for this corporate bond?