An FI manager has calculated the following values and weights to assess the credit risk and likelihood
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An FI manager has calculated the following values and weights to assess the credit risk and likelihood of having to reschedule a loan. From the Z -score calculated using these weights and values, is the manager likely to approve the loan? Validation tests of the Z -score model indicated that scores below 0.500 were likely to be nonreschedulers, while scores above 0.700 indicated a likelihood of rescheduling. Scores between 0.500 and 0.700 do not predict well.
Variable Country Value Weight DSR 1.25 0.05 IR 1.60 0.10 INVR 0.60 0.35 VAREX 0.15 0.35 MG 0.02 0.15
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Financial Institutions Management
ISBN: 9780078034800
8th Edition
Authors: Anthony Saunders, Marcia Cornett
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