In the late 1960s, Ed Altman developed a model to predict if a company was at severe risk of going bankrupt. He called his statistic, Altman's Z-score, now a widely used score in finance. Based on the name of the statistic, which statistical distribution would you guess this came from?

Question

Social Studies

Yasmine Gilmore

21 July, 20:17

In the late 1960s, Ed Altman developed a model to predict if a company was at severe risk of going bankrupt. He called his statistic, Altman's Z-score, now a widely used score in finance. Based on the name of the statistic, which statistical distribution would you guess this came from?

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Answers (1)

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Jackson Harrell · Answer 1

Answer: Standard normal distribution

Explanation:

Based on the name of the statistic, standard normal distribution would have come from this. Standard normal distribution is referred to as or known as a normal distribution which has a mean value of 0 and the standard deviation value of 1. Standard normal distribution tends to be centered at 0 and degree to which one deviates from mean value is thus given by its standard deviation.