Which of the Following Statements Does Not Reflect a Borrower-Specific

question 72

Multiple Choice

Which of the following statements does not reflect a borrower-specific factor often used in qualitative default risk models?

• A)Reputation is an implicit contract regarding borrowing and repayment that extends beyond the formal explicit legal contract.
• B)A borrower's leverage ratio is positively related to the probability of default over all levels of debt.
• C)Firms with high earnings variance are less attractive credit risks than those firms that have a history of stable earnings.
• D)Loans can be collateralized or uncollateralized.
• E)Reputation is a key reason why initial public offering of debt securities by small firms have a higher interest rate than do debt issues of more seasoned borrowers.

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Definitions:

Traditional Masculine

Cultural norms and values that define the behaviors, attitudes, and roles deemed appropriate for men in a given society, often emphasizing strength, stoicism, and leadership.

Gender Schema

A cognitive framework that organizes information relevant to gender, influencing how individuals perceive and behave based on their gender roles.

Gender Role

A set of societal norms dictating what types of behaviors are generally considered acceptable, appropriate, or desirable for a person based on their actual or perceived sex.

Androgyny

A state of being that encompasses characteristics or qualities traditionally associated with both genders.