Using regression analysis on historical loan losses, a bank has estimated the following: XPMC=0.002+1.5XPM and XPMR=0.002+2.75XPM...
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Using regression analysis on historical loan losses, a bank has estimated the following: XPMC=0.002+1.5XPM and XPMR=0.002+2.75XPM where XPMC equals the profit margin in the commercial sector and XPMR equals the profit margin in the retail sector and XPM equals profit margin for its total loan portfolio. The senior bank manager questions this regression result. However, 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: XPMC=0.002+1.5XPM and XPMR=0.002+2.75XPM where XPMC equals the profit margin in the commercial sector and XPMR equals the profit margin in the retail sector and XPM equals profit margin for its total loan portfolio. The senior bank manager questions this regression result. However, 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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Soluion year CQI Loan Conqumer hoans Telal loany 2012 000 80 0165 00075 2011 ... View the full answer
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