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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
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 non-reschedulers, while scores above 0.700 indicated a likelihood of rescheduling. Scores between 0.500 and 0.700 do not predict well.[5 Marks]
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