One of the functions of bank branch offices is to arrange profitable loans to small businesses and individuals. As part of a study of the effectiveness of branch managers, a bank collected data from a sample of branches on current total loan volumes (the dependent variable), total deposits held in accounts opened at that branch, the number of such accounts, the average number of daily transactions, and the number of employees at the branch. Correlations and a scatterplot matrix are shown in the figure.
a. Which independent variable is the best predictor of loan volume?
b. Is there a substantial collinearity problem?
c. Do any points seem extremely influential?

  • CreatedNovember 21, 2015
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