How Would You Interpret a Z-Score of 2.25

Multiple Choice

How would you interpret a Z-score of 2.25?

A) The Z-score lies within the 'safe' zone and thus a loan should be granted.
B) The Z-score lies within the 'high default' zone and thus a loan should be granted.
C) The Z-score lies within the 'zone of ignorance' and thus the borrower may or may not default.
D) The interpretation of the Z-score is always dependent on an FI manager's subjective opinion.