The Key Intuition of a Z-Score Model Like Altman's Is

question 13

Multiple Choice

The key intuition of a Z-score model like Altman's is that:

• A) only publicly traded firms can be evaluated.
• B) one will be just as well off by guessing on default rates.
• C) all corporations will default at least once.
• D) financial profiles of bankrupt and non-bankrupt firms are very different one year before bankruptcy.
• E) privately traded firms have better financial information which are disclosed to lenders and need not rely on any efficient market notions.

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Definitions:

Gymnosperm Phyla

A group of seed-producing plants that includes conifers and cycads, characterized by seeds that are not enclosed within an ovary.

Morphology

The examination of the shape and architecture of living entities and their unique anatomical characteristics.

Ovary Wall

The outer layer of an ovary in plants or animals, often involved in protecting and nurturing developing reproductive cells.

Maidenhair Tree

Another name for Ginkgo biloba, a unique species of tree known for its fan-shaped leaves and resilience, often considered a living fossil.