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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