D21-F01-A07 · four-stage decision lab · synthetic teaching data

Bharath-Shumway Naive Distance-to-Default

Calculate naïve firm value, debt volatility, asset volatility, distance, and normal-CDF probability while preserving every approximation and empirical-use boundary.

Question: How does the Bharath-Shumway approximation turn equity, book debt, volatility, and prior return into a no-solver distance-to-default benchmark?

Stage 1 · orient

Choose the analytical question before touching the number

Decision boundary

Invariant:

Stage 2 · predict

Commit to a direction before revealing the challenge

Your prediction
Stage 3 · experiment

Move one declared driver; keep the scenario contract fixed

Complete 61-state output series and evidence trace

Scenario result traceAll independently calculated states with the selected state marked.

Stage 4 · explain

Compare the anchor and candidate before interpreting

Anchor result
Candidate result
ComponentAnchorCandidateWhat changed?

Misconception check:

Inspect the structured input and output

Input

Output


Scenario evidence index
The lab surfaces curated stops for instruction while preserving all seven scenarios × 61 independently calculated states for audit.
ScenarioDriverQuestionRangeDecision segments