Based on the Moody's KMV Model Which of the Following

question 49

Multiple Choice

Based on the Moody's KMV model which of the following is not correct? A: Growth variables are important for default analysis. rapid growth will lead to lower probability of default and rapid decline will lead to higher probability of default. B: Activity ratios are relevant for default analysis. A large stock of inventories relative to sales will lead to a higher probability of default.

• A) Only Statement A is correct
• B) Both the statements are correct
• C) None of the statements is correct
• D) Only Statement B is correct

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Definitions:

Overt Behavior

Any observable action or response made by an individual that can be seen and measured by others.

Mental Process

Internal cognitive operations that include thinking, perceiving, remembering, and decision-making.

Subjective Perceptions

Individual interpretations or feelings about experiences, objects, or concepts that are influenced by personal opinions, background, and emotions.

Consciousness

The awareness of oneself, one’s thoughts, feelings, and environment, distinct from but related to collective consciousness in its focus on the individual level of awareness.