CFA Practice Question

There are 252 practice questions for this study session.

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.

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