How Would You Interpret a Z-Score of 2.25

question 21

Multiple Choice

How would you interpret a Z-score of 2.25?

• A)The Z-score lies within the 'safe' zone and thus a loan should be granted.
• B)The Z-score lies within the 'high default' zone and thus a loan should be granted.
• C)The Z-score lies within the 'zone of ignorance' and thus the borrower may or may not default.
• D)The interpretation of the Z-score is always dependent on an FI manager's subjective opinion.

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Definitions:

Synthesize

To combine simpler substances chemically to form a more complex substance, often used in reference to the production of chemical compounds in a laboratory.

Organic Product

A compound that contains carbon atoms, typically formed as a result of organic reactions involving organic molecules or reagents.

Major

Pertaining to the dominant or most abundant product or outcome in a chemical reaction.

Structure

The arrangement of atoms within a molecule that defines its shape, properties, and reactivity.