The Following Is an Example of a Credit Scoring Model

question 32

Multiple Choice

The following is an example of a credit scoring model to estimate the probability of debt rescheduling for country I:
Pᵢ= 0.25DSRᵢ+ 0.17IRᵢ- 0.03 INVRᵢ+ 0.84VAREXᵢ+ 0.93 MGᵢ
Where Pi is the probability of rescheduling country I's debt; DSR is the country's debt service ratio; IR is the country's import ratio; INVR is the country's investment ratio; VAREX is the country's variance of export revenue; and MG is the country's rate of growth of the domestic money supply.
-What is an important determinant of rescheduling probability if inflation is a prime concern?

• A)The debt service ratio.
• B)The import ratio.
• C)The investment ratio.
• D)The variance of export revenue.
• E)The rate of growth of the domestic money supply.

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