Which of the Following Is a Problem in Using Discriminant

question 33

Multiple Choice

Which of the following is a problem in using discriminant analysis to evaluate credit risk?

• A)It does not consider gradations of default.
• B)The weights in the discriminant function are assumed to be dynamic.
• C)It can include hard-to-quantify factors.
• D)Data on loan specific information of banks are readily available.
• E)It does not assume that variables are independent of one another.

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Definitions:

Coalition Formation

The process of building alliances or partnerships among individuals or organizations to achieve common goals.

Compliance

The action of conforming to a request, demand, or regulation, often driven by external pressures.

Resistance

The refusal to accept or comply with something, or the attempt to prevent something by action or argument.

Compliance

The act of conforming to or following rules, standards, laws, or requests made by authority figures or governing bodies.