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.