Which of the Following Statements Is Incorrect

question 115

Multiple Choice

Which of the following statements is incorrect?

• A)While linear probability models divide firms into high or low bankruptcy risk classes, logit models and linear discriminant models produce a value for the expected probability of bankruptcy.
• B)The logit model overcomes a weakness of the linear probability model by restricting the estimated range of bankruptcy probabilities to lie between 0 and 1.
• C)All three credit scoring models use past data, such as financial ratios, as inputs to explain repayment experiences on old debt.
• D)All of these statements are correct.

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Definitions:

Structured

Organized and planned in a methodical way, often referring to schedules, research designs, or informational frameworks.

Structured

means being organized or arranged according to a predetermined or systematic plan.

Generative

In various fields, generative denotes the capacity to produce or create something, often in a way that can spontaneously derive complex structures from simpler rules.

Semantic

Relates to the meanings of words and phrases in language.