Which of the Following Statements Is Incorrect

question 115

Multiple Choice

Which of the following statements is incorrect?

• A)While linear probability models divide firms into high or low bankruptcy risk classes, logit models and linear discriminant models produce a value for the expected probability of bankruptcy.
• B)The logit model overcomes a weakness of the linear probability model by restricting the estimated range of bankruptcy probabilities to lie between 0 and 1.
• C)All three credit scoring models use past data, such as financial ratios, as inputs to explain repayment experiences on old debt.
• D)All of these statements are correct.

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Definitions:

Retail Cluster

A grouping of similar types of retail outlets or stores located in proximity to each other designed to provide a varied shopping experience for consumers.

Population Base

The total number of individuals within a specific area or demographic segment that could potentially use or buy a particular product or service.

Retail Location

A physical space where consumer goods are sold directly to customers, crucial for a business's accessibility and sales performance.

Extreme-Value Retailers

Stores that specialize in offering a wide range of products at exceptionally low prices, often in a no-frills shopping environment.