Which of the Following Statements Is Incorrect

question 22

Multiple Choice

Which of the following statements is incorrect?

• A) While linear probability models divide firms into high or low bankruptcy risk classes, logit models and linear discriminant models produce a value for the expected probability of bankruptcy.
• B) The logit model overcomes a weakness of the linear probability model by restricting the estimated range of bankruptcy probabilities to lie between 0 and 1.
• C) All three credit scoring models use past data, such as financial ratios, as inputs to explain repayment experiences on old debt.
• D) All of the statements are correct.

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Definitions:

Promotion Period

A specific time frame during which marketing efforts or special offers are intensified to stimulate sales or awareness.

Hydrostatic Pressure

The pressure exerted by a fluid at equilibrium due to the force of gravity acting upon it.

Filtration Membrane

A biological or synthetic membrane that acts as a selective barrier, allowing some substances to pass while blocking others, especially used in filtering substances from the blood in the kidneys.

Nephron

The basic structural and functional unit of the kidney, responsible for filtering blood and producing urine.