Simulations by Moody's Analytics Have Shown Which of the Following

question 43

Multiple Choice

Simulations by Moody's Analytics have shown which of the following models to be relatively better predictors of corporate failure and distress?

• A)Z score-type models.
• B)S&P rating changes.
• C)Expected Default Frequency (EDF) models.
• D)Linear probability models.
• E)Logit models.

---

Definitions:

Compounded Semi-annually

The process of adding interest to the principal sum of a loan or deposit, where the interest is added twice a year.

Perpetuity

A type of annuity that continues indefinitely, making regular payments for an infinite amount of time.

Compounded Monthly

The method of calculating interest where the earned interest is added to the principal each month, leading to interest on interest.

Perpetuity

Perpetuity refers to a type of annuity that pays a consistent amount of income to an individual indefinitely.