Discriminant analysis

• Is a mathematical approach which tries to differentiate between classes, categories or clusters or groups. It is mostly used for Credit Scoring or predicting bankruptcies. It partitions a sample into Yes or No groups, Positive and Negative, or Bullish and Bearish.

• A statistical process that links the probability of default to a specified set of financial ratios.


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 Embedded terms in definition
Credit scoring
Financial ratio
 Related Terms

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