Business Credit-Scoring Models Suffer from Several Weaknesses

question 2

Multiple Choice

Business credit-scoring models suffer from several weaknesses. These include which of the following?
I. Credit-score models are not statistically sound tools to use in making a lending decision.
II. The appropriate weights on a credit-score model are likely to change unpredictably over time.
III. These models ignore nonquantifiable behavioral factors,such as a relationship with the bank and reputation.
IV. Credit-scoring models discriminate against minorities.

• A)I and II only
• B)II and III only
• C)II,III,and IV only
• D)I,II,and III only
• E)I,II,III,and IV