The Following Is an Example of a Credit Scoring Model

question 89

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.
What is an important determinant of rescheduling probability if the country is providing several incentives to increase domestic savings?

• A)The debt service ratio.
• B)The import ratio.
• C)The investment ratio.
• D)The variance of export revenue.
• E)The rate of growth of the domestic money supply.

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Definitions:

Salespersons

Individuals who sell goods and services to customers, aiming to meet customer needs and achieve sales targets.

Absorption Costing

An accounting approach that incorporates all costs of production, including both variable and fixed overheads, into the price of a product.

Variable Costing

An accounting method that includes only variable production costs in the cost of goods sold and treats fixed overhead costs as period expenses.

Manufacturing Cost

This encompasses the total expenses related to producing goods, including costs for materials, labor, and overhead.