The Following Is an Example of a Credit Scoring Model

question 86

Multiple Choice

The following is an example of a credit scoring model to estimate the probability of debt rescheduling for country I:

P_i = 0.25DSR_i + 0.17IR_i - 0.03 INVR_i + 0.84VAREX_i + 0.93 MG_i

Where P_i is 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.

According to this credit scoring model,the variable that has the highest positive impact on the probability of rescheduling is

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

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Definitions:

Giulio Romano

An Italian painter and architect of the High Renaissance and early Mannerist periods, known for his work in Raphael's school and for his contributions to the Palazzo del Te in Mantua.

Federico Gonzaga

An Italian nobleman and the Duke of Mantua from 1519 until his death in 1540, known for his patronage of the arts during the Renaissance.

Mannerist Version

Refers to an adaptation or work in the style of Mannerism, a European art style from the late Renaissance that emphasized artificiality and stylized forms over naturalistic representation.

Last Supper

The final meal that, according to Christian belief, Jesus shared with his Apostles before his crucifixion, a subject widely depicted in Christian art.