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Suppose the estimated logit model is Z=6.1563-5.3551X -3.1454 X2 + error where X, is cash flow to debt ratio and X2 is current assets
Suppose the estimated logit model is Z=6.1563-5.3551X -3.1454 X2 + error where X, is cash flow to debt ratio and X2 is current assets to current liability Borrower Borrower A Borrower B 0.1379 0.3703 X 2 2.6123 1.9941 Probability of Default What is the probability of default for the respective borrowers? After determining the probability, the lending officer is concerned about the variable, current assets to current liability. Explain why the lending officer should be concerned about this variable.
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