Assuming That a Credit Decision Has Been Analyzed and Credit

question 2

Multiple Choice

Assuming that a credit decision has been analyzed and credit refused due to a negative expected profit,which of the following changes,if of sufficient magnitude,might change the decision to one of approval?

• A) Increase the percentage of profit margin.
• B) Decrease the probability of payment.
• C) Increase the discount rate.
• D) Reduce the expected profit.

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Definitions:

Nominal Variable

A categorical variable for which different values represent different categories without any intrinsic ranking order.

Interval Data

A type of numerical data involving measurements where both the order and the exact differences between the measurements matter, but there is no true zero point.

Quantitative Data

Data that can be quantified and verified, and is amenable to statistical manipulation. It represents the quantity of something rather than its quality.

Numerical Data

Information that is quantifiable and usually collected in number form, used for statistical analysis or calculations.