Question
A finance executive would like to determine if a relationship exists between the current earnings per share(EPS) of a bank and the independent variables listed
A finance executive would like to determine if a relationship exists between the current earnings per share(EPS) of a bank and the independent variables listed below.
Total assets($ billions)
Previousperiod's return on average assets(ROAA)
Previousperiod's EPS
Previousperiod's return on average equity(ROAE)
ROAA measures how effectively assets areutilized, and ROAE measures afirm's profitability. Use the accompanying data to complete parts a through e.
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a. Use advanced statistical software or an ExcelAdd-in like PHStat to check for the presence of multicollinearity.
Find the variance inflation factor(VIF) for each independent variable.
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