11-79 Which of the Following Is a Problem in Using

question 69

Multiple Choice

11-79 Which of the following is a problem in using discriminant analysis to evaluate credit risk?

• A)It does not consider gradations of default.
• B)The weights in the discriminant function are assumed to be dynamic.
• C)It can include hard-to-quantify factors.
• D)Data on loan specific information of banks are readily available.
• E)It does not assume that variables are independent of one another.

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Definitions:

Phosphodiesterase

Enzyme that splits phosphodiester bonds—that is, that breaks down cyclic AMP to AMP.

Phosphodiesterase

An enzyme that plays a role in cell signal transduction by breaking down phosphodiester bonds.

Cyclic AMP

A secondary messenger used for intracellular signal transduction, such as transferring the effects of hormones like glucagon and adrenaline.

GTP

Guanosine triphosphate, a molecule that provides energy for many biochemical cellular processes by hydrolysis of its high-energy phosphate bonds.