Over the past 10 years, a bank has experienced the following loan losses on its C&l loans, consumer loans, and total loan portfolio. Year 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 C&I Loans 0.0080 0.0088 0.0100 0.0120 0.0104 0.0084 0.0072 0.0080 0.0096 0.0144 Consumer Loans 0.0165 0.0183 0.0210 0.0255 Using regression analysis on these historical loan losses, the bank has estimated the following: Xc = 0.002 +0.8X and Xh = 0.003 + 1.8XL where Xc = loss rate in the commercial sector, X = loss rate in the consumer (household) sector, and XL = loss rate for its total loan portfolio. Commercial Sector = 18.0% ; Consumer Sector = 8.0% (1) If the bank's total loan loss rates increase to 10 percent, what are the expected loss rate increases in the commercial and consumer sectors? Commercial Sector = 8.0% ; Consumer Sector = 18.0% 0.0219 0.0174 0.0147 0.0165 0.0201 0.0309 Commercial Sector = 18.3% ; Consumer Sector = 8.2% Total Loans 0.0075 0.0085 0.0100 0.0125 0.0105 0.0080 0.0065 0.0075 0.0095 0.0155 Commercial Sector = 8.2% ; Consumer Sector = 18.3% (2) In which sector should the bank limit its loans and why? None of the options. Commercial Sector; The loss rates are systematically higher than the loss rates for the total loan portfolio. Consumer Sector; The loss rates are systematically lower than the loss rates for the total loan portfolio. Consumer Sector; The loss rates are systematically higher than the loss rates for the total loan portfolio. Over the past 10 years, a bank has experienced the following loan losses on its C&l loans, consumer loans, and total loan portfolio. Year 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 C&I Loans 0.0080 0.0088 0.0100 0.0120 0.0104 0.0084 0.0072 0.0080 0.0096 0.0144 Consumer Loans 0.0165 0.0183 0.0210 0.0255 Using regression analysis on these historical loan losses, the bank has estimated the following: Xc = 0.002 +0.8X and Xh = 0.003 + 1.8XL where Xc = loss rate in the commercial sector, X = loss rate in the consumer (household) sector, and XL = loss rate for its total loan portfolio. Commercial Sector = 18.0% ; Consumer Sector = 8.0% (1) If the bank's total loan loss rates increase to 10 percent, what are the expected loss rate increases in the commercial and consumer sectors? Commercial Sector = 8.0% ; Consumer Sector = 18.0% 0.0219 0.0174 0.0147 0.0165 0.0201 0.0309 Commercial Sector = 18.3% ; Consumer Sector = 8.2% Total Loans 0.0075 0.0085 0.0100 0.0125 0.0105 0.0080 0.0065 0.0075 0.0095 0.0155 Commercial Sector = 8.2% ; Consumer Sector = 18.3% (2) In which sector should the bank limit its loans and why? None of the options. Commercial Sector; The loss rates are systematically higher than the loss rates for the total loan portfolio. Consumer Sector; The loss rates are systematically lower than the loss rates for the total loan portfolio. Consumer Sector; The loss rates are systematically higher than the loss rates for the total loan portfolio