How can discriminant analysis be used to make credit decisions?
A. By discriminating between good and bad borrowers.
B. By using statistical analysis to predict the default probabilities
C. By using statistical analysis to isolate and weight factors to arrive at default risk classification of a commercial borrower.
D. By using statistical analysis to bypass qualitative credit decision making.
E. By updating FI bankruptcy experiences.
Ans: C. By using statistical analysis to isolate and weight factors to arrive at default risk classification of a commercial borrower.
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