1. which of the following statement is incorrect about z-score?

a. the z-score indicates the relative likelihood of firm not going to bankrupt.

b. the higher of z-score means the firm is less likely to go bankrupt.

c. the weights are calculated to maximize the difference in z-scores within bankrupt or non-bankrupt groups.

d. the weights are calculated to maximize the difference in z-scores between two groups.

2. which of the following statement is correct?

a. the capital assets pricing model states that the only diversifiable risk that has to be bome is the risk in the market as a whole.

b. all statements are correct

c. the capital assets pricing model requires estimate beta which canbe accurately done by running regression analysis.

d. fundamental risk is the risk that an investor bears as a result of the way a firm conducts its activities.

e. all statements are incorrect.

f. profit risk is the risk of profit margins changing for a guven level of total assets.