The Following Is an Example of a Credit Scoring Model

question 8

Multiple Choice

The following is an example of a credit scoring model to estimate the probability of debt rescheduling for country I: P_i = 0.25 DSR_i + 0.17 IR_i - 0.03 INVR_i + 0.84 VAREX_i + 0.93 MG_i
Where P_iis the probability of rescheduling country I's debt; DSR is the country's debt service ratio; IR is the country's import ratio; INVR is the country's investment ratio; VAREX is the country's variance of export revenue; and MG is the country's rate of growth of the domestic money supply.
If two countries are identical in all respects except that country A's debt service ratio is 1.5, country B's debt service ratio is 1.25, country A's import ratio is 0.75, and country B's import ratio is 0.90, which country poses the least sovereign country risk?

• A)Country A, because the higher debt service ratio's negative impact on the country's risk exposure outweighs the impact of the lower import ratio effect.
• B)Country B, because the higher debt service ratio's negative impact on the country's risk exposure outweighs the impact of the lower import ratio effect.
• C)Country A, because the higher debt service ratio's positive impact on the country's risk exposure outweighs the impact of the lower import ratio effect.
• D)Country B, because the lower debt service ratio's impact outweighs the higher import ratio's impact on the country risk exposure.
• E)They both have the same sovereign country risk exposure.

Recognize the methods for measuring, recording, and reporting product costs.

Identify the documents used in job order costing systems for recording direct labor and material costs.

Understand the treatment of factory overhead, including the concepts of applied, underapplied, and overapplied overhead.

Comprehend the role of perpetual inventory systems and the maintenance of controlling accounts and subsidiary ledgers in job order costing.

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Definitions:

Gender

Social and cultural distinctions associated with being male or female, as opposed to biological differences.

Biological Sex

The physical characteristics, such as reproductive and sexual anatomy, chromosomes, and hormone levels, that are used to classify individuals as male, female, or intersex at birth.

Reproductive Distinctions

The inherent or socially constructed differences in reproductive roles and functions among sexes and genders.

Hermaphrodite

An organism that has both male and female reproductive organs, allowing it to produce both sperm and ova.