Business Credit-Scoring Models Suffer from Several Weaknesses

question 2

Multiple Choice

Business credit-scoring models suffer from several weaknesses. These include which of the following?
I. Credit-score models are not statistically sound tools to use in making a lending decision.
II. The appropriate weights on a credit-score model are likely to change unpredictably over time.
III. These models ignore nonquantifiable behavioral factors,such as a relationship with the bank and reputation.
IV. Credit-scoring models discriminate against minorities.

• A)I and II only
• B)II and III only
• C)II,III,and IV only
• D)I,II,and III only
• E)I,II,III,and IV

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Definitions:

Reinforcement Material

A substance added to something to make it stronger or more effective.

Section Modulus

A geometric property of a cross-section used in engineering to determine how a beam or structural element will deform under load.

Twistability

The ability of a material or structure to undergo twisting deformation without failing, relevant in engineering and materials science.

Frame Member

Structural components of a vehicle's frame that provide support and rigidity to the vehicle's body, can be longitudinal, lateral, or cross members.