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

question 64

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

---

Definitions:

NAFTA

The North American Free Trade Agreement, a treaty between the U.S., Canada, and Mexico that eliminated most tariffs on trade between the countries.

Uniform Commercial Code

A complete array of statutes that regulate all business dealings across the United States.

NAFTA

The North American Free Trade Agreement, a treaty between the United States, Canada, and Mexico that eliminates most tariffs on trade between them.

CISG

The United Nations Convention on Contracts for the International Sale of Goods, a treaty providing a uniform framework for international commerce.