Discriminant Analysis

Hair et al. (2006) explains discriminant analysis as a multivariate dependence technique basically used to predict and explain nonmetric variables as in the case of present study. The independent variable used in the study is a categorical variable i.e. credit risk rating reflected in nonmetric nature of variable. As multiple regression deals primarily with metric variables, multiple discriminant analysis is a technique used for nonmetric ones. The primary purpose of MDA is to spot the group to which the object belongs.

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