Question: please comment the answer. Using regression analysis on historical loan losses, a bank has estimated the following: Xc = 0.002 +0.8X, and XR = 0.002+1.8X,

please comment the answer. Using regression analysis on historical loan losses,

please comment the answer.

Using regression analysis on historical loan losses, a bank has estimated the following: Xc = 0.002 +0.8X, and XR = 0.002+1.8X, where X equals the loss rate in the commercial sector and X, equals the loss rate in the retail sector and X, equals loss rate for its total loan portfolio. Based on the regression analysis alone what sector should the bank limit its loans. Reconcile the existence of both retail and commercial loans. Using regression analysis on historical loan losses, a bank has estimated the following: Xc = 0.002 +0.8X, and XR = 0.002+1.8X, where X equals the loss rate in the commercial sector and X, equals the loss rate in the retail sector and X, equals loss rate for its total loan portfolio. Based on the regression analysis alone what sector should the bank limit its loans. Reconcile the existence of both retail and commercial loans

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To address this question lets analyze the regression equations provided Equations 1 For Commercial Sector Xc XC 0002 08XL Where XC represents the loss ... View full answer

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