= Over the last ten years, a bank has experienced the following loan losses on its C&I loans, consumer loans, and total loan portfolio. Year C&I Loans Consumer Loans Total Loans 2009 0.0080 0.0165 0.0075 2008 0.0088 0.0183 0.0085 2007 0.0100 0.0210 0.0100 2006 0.0120 0.0255 0.0125 2005 0.0104 0.0219 0.0105 2004 0.0084 0.0174 0.0080 2003 0.0072 0.0147 0.0065 2002 0.0080 0.0165 0.0075 2001 0.0096 0.0201 0.0095 2000 0.0144 0.0309 0.0155 Using regression analysis on these historical loan losses, the bank has estimated the following: X XX X C L

 h L 0.. .. 002 0 8 0 003 1 8 and where XC = loss rate in the commercial sector, Xh = loss rate in the consumer (household) sector, and XL = loss rate for its total loan portfolio. If the bank’s total loan loss rates increase by 10 percent, what are the expected loss rate increases in the commercial and consumer sectors? In which sector should the bank limit its loans and why?