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Credit ratings and credit scores are : A. ordinal rankings. B. cardinal rankings. C. exponential rankings.

Credit ratings and credit scores are :

A.

ordinal rankings.
B.

cardinal rankings.
C.

exponential rankings.
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Answer #1

Answer is a) ordinal rankings

This is because in ordinal rankings every observation is categorised and ordered with respect to a specified characteristic. The intervals in specific values are not constants. They are based on specified characteristic like probability of bankruptcy, loss given default etc. The ratings are of different types like Aaa or Bbb.

Ratings are not represented exponentially so part c is wrong. Also, credit ratings do not indicate quantities so cardinal rankings is also incorrect.

I hope this helps you.

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Thanks & Regards,

Shivam Bhutani

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