Which of the Following Is Not Likely to Be a Characteristic

question 38

Multiple Choice

Which of the following is not likely to be a characteristic of a numerical credit scoring system?

• A) Is used to prescreen credit applications
• B) Analyzes financial ratios to determine credit
• C) Is less subjective than using individual loan officers
• D) Is most appropriate for consumer loans

---

Definitions:

AMT Adjustment

A modification required under the Alternative Minimum Tax rules to convert regular taxable income into AMT taxable income.

AMT Depreciation

Depreciation methods under the Alternative Minimum Tax system, which can differ from regular tax depreciation in terms of rates and methods.

AMT Depreciation Adjustment

Adjustments for depreciation that are required when calculating the Alternative Minimum Tax, a parallel tax system designed to ensure that certain taxpayers pay a minimum amount of tax.

7-year Property

Refers to assets that have a recovery period of 7 years under the Modified Accelerated Cost Recovery System for depreciation.