CFA Practice Question

There are 399 practice questions for this topic.

CFA Practice Question

A structural model gets its name because:

A. it depends on the structure of a company's balance sheet.
B. it depends on the industry structure such as number and size of competitors.
C. it depends on the structure of the economy.
Correct Answer: A

It is also referred to as a company-value model because the key variable is the asset value of the company. The probability of default depends explicitly on the company's assumed liability structure.

User Contributed Comments 0

You need to log in first to add your comment.