Abstract: The probability of default (PD) is the essential credit risks in the finance world. It provides an estimate of the likelihood that a borrower will be unable to meet its debt obligations. Purpose: This paper computes the probability of default (PD) of utilizing market-based data which...

In 2007, Michigan began requiring all high school students to take the ACT college entrance exam. This natural experiment allows us to evaluate the performance of several parametric and semiparametric sample selection correction models. We apply each model to the censored, prepolicy test score...