2026 FIN 410 Ch. 6 Assignment With All Correct Answers Graded A+
Which two adverbs that describe balance sheet quality in terms of the firm's economic resources
(assets) and non-equity claims against the resources (liabilities) are reflected on the balance
sheet.AnswerPrecisely and completely
Which tactic is used to increase comparability?AnswerVariable demeaning
b. For each of the following, would you recommend the use of equal-weighted industry ratios or value-
weighted industry ratios for comparison purposes?Answer1.) To value a mom-and-pop laundromat -
Equal Weighted
2.) To compare Walmart to an individual Etsy vendor shop - Value Weighted
3.) To get a feel for what is happening in the entire economy - Value Weighted
4.) To compare steel production in China to steel production in the United States - Value Weighted
5.) To compare one Subway restaurant to another - Equal Weighted
6.) To compare Kia and Tesla to the car industry - Equal Weighted or Value Weighted
Choose among these attributes in the data dictionary and indicate which are likely to predict loans that
will go delinquent or that will ultimately be fully repaid and which are not predictive.Answer1.) acceptD
(Date when the borrower accepted the offer) - No
2.) desc (Loan description provided by the borrower) - No
3.) dti (A ratio of debt owed to income earned) - Yes
4.) grade (LendingClub assigned loan grade) - Yes
5.) home_ownership (Value include Rent, Own, Mortgage, Other) - Yes
6.) loanAmnt (Amount of the loan) - Yes
7.) next_pymnt_d (Next scheduled payment date) - No
8.) term (Number of payments on the loan) - No
9.) tot_cur_bal (Total current balance of all accounts) - Yes
If a firm is performing on par with its industry peers, its industry adjusted financial ratios will
be:Answerapproximately zero.
Which two adverbs that describe balance sheet quality in terms of the firm's economic resources
(assets) and non-equity claims against the resources (liabilities) are reflected on the balance
sheet.AnswerPrecisely and completely
Which tactic is used to increase comparability?AnswerVariable demeaning
b. For each of the following, would you recommend the use of equal-weighted industry ratios or value-
weighted industry ratios for comparison purposes?Answer1.) To value a mom-and-pop laundromat -
Equal Weighted
2.) To compare Walmart to an individual Etsy vendor shop - Value Weighted
3.) To get a feel for what is happening in the entire economy - Value Weighted
4.) To compare steel production in China to steel production in the United States - Value Weighted
5.) To compare one Subway restaurant to another - Equal Weighted
6.) To compare Kia and Tesla to the car industry - Equal Weighted or Value Weighted
Choose among these attributes in the data dictionary and indicate which are likely to predict loans that
will go delinquent or that will ultimately be fully repaid and which are not predictive.Answer1.) acceptD
(Date when the borrower accepted the offer) - No
2.) desc (Loan description provided by the borrower) - No
3.) dti (A ratio of debt owed to income earned) - Yes
4.) grade (LendingClub assigned loan grade) - Yes
5.) home_ownership (Value include Rent, Own, Mortgage, Other) - Yes
6.) loanAmnt (Amount of the loan) - Yes
7.) next_pymnt_d (Next scheduled payment date) - No
8.) term (Number of payments on the loan) - No
9.) tot_cur_bal (Total current balance of all accounts) - Yes
If a firm is performing on par with its industry peers, its industry adjusted financial ratios will
be:Answerapproximately zero.
