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

question 7

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 the options are problems associated with using the Z-score model.

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Definitions:

Freudian Explanation

Interpretations based on Sigmund Freud's theories, particularly those related to the influence of the unconscious mind, childhood experiences, and psychosexual development on behavior and personality.

Anxiety Disorders

A category of mental health disorders characterized by significant feelings of anxiety and fear, which can interfere with daily activities.

Freudian Theory

A set of psychoanalytic theories and therapeutic techniques related to the study of the unconscious mind, developed by Sigmund Freud.

DSM

The Diagnostic and Statistical Manual of Mental Disorders, a comprehensive classification of officially recognized psychiatric disorders, used by clinicians and researchers for diagnostic and research purposes.