a). The coefficients and intercept given in part a are for the linear equation in the form 0 = 0 + 11 + 22. Rearrange the formula (using algebra) such that it is in the form 2 = + 1.

0= W₀ + W₁X₁ +W₂X₂

-W₂X₂ =W₀+W₁X₁

X₂ =(-W₀/W₂) (W₁/W₂) X₁

Let m = - W₀/W₂ and b = W₁/W₂

X₂ = m + b(X₁) where m= -W₀/W₂ and b = -W₁/W₂

Create a scatter plot of the two variables TotExp and Totlns . Treat the weak and strong records as two separate series/sets of data in the plot.

Obs	Financial Condition	TotCap/Assets	TotExp/Assets	TotLns&Lses/Assets
1	1	9.7	0.12	0.65
2	1	1	0.11	0.62
3	1	6.9	0.09	1.02
4	1	5.8	0.1	0.67
5	1	4.3	0.11	0.69
6	1	9.1	0.13	0.74
7	1	11.9	0.1	0.79
8	1	8.1	0.13	0.63
9	1	9.3	0.16	0.72
10	1	1.1	0.16	0.57
11	0	11.1	0.08	0.43
12	0	20.5	0.12	0.8
13	0	9.8	0.07	0.69
14	0	7.9	0.08	0.53
15	0	9.6	0.09	0.73
16	0	12.5	0.09	0.3
17	0	18.3	0.08	0.49
18	0	7.2	0.11	0.55
19	0	14	0.08	0.44
20	0	8.3	0.08	0.51

Add the line you solved for in part (a) to the scatter plot. (You will need to create a column of values for TotExp/Assets, e.g. [0, .05, .10, .15, .20], then calculate the value from the line in part (a) for each value. Suppose a bank has TotExp/Assets = 0.12 and TotLns&Lses/Assets = 0.48. Would this bank be classified as weak or strong?