All of the Following Are Problems Associated with Using the Z-Score

question 18

Multiple Choice

All of the following are problems associated with using the Z-score model to make credit risk evaluations except _______________.

• A) The model does not benchmark firms to the average in the industry
• B) The model does not use important data that is difficult to quantify such as the phase of the business cycle.
• C) The model categorizes firms as either high risk or low risk
• D) All of these are problems associated with using the Z-score model

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Definitions:

Hypothesis

A suggested theory formulated from minimal evidence, intended to initiate more detailed exploration.

Replication

A repetition of an experiment that yields the same results.

Physical Safety

The condition of being protected from potential harm or injury to one's body.

Privacy

The state or condition of being free from unauthorized intrusion or disclosure of personal information.