Suppose the estimated logit model is Z=6.165.36X - 3.14X2 + error where X, is cash flow...

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Suppose the estimated logit model is Z=6.165.36X - 3.14X2 + error where X, is cash flow to debt ratio and X2 is current assets to current liability Borrower Borrower A Borrower B 0.14 0.38 X2 2.55 2.75 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. Suppose the estimated logit model is Z=6.165.36X - 3.14X2 + error where X, is cash flow to debt ratio and X2 is current assets to current liability Borrower Borrower A Borrower B 0.14 0.38 X2 2.55 2.75 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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To determine the probability of default for the respective borrowers we first need to calculate the ... View the full answer