With respect to the KMV model, which of the following statements is CORRECT?

Select one:

a. KMV developed its own version of the Merton model and spent a lot of time studying defaulted companies in order to transform the distance to default into a default probability.

b. The greater the distance to default, the higher the probability of default.

c. A and B are both correct.

d. The KMV model requires only stock market information to derive the expected default frequencies.