Profitability remains a challenge for banks with less than $2billion of assets. The business problem facing you as a bank analyst relates to the factors that affect return on assets (ROA), an indicator of how profitable a company is relative to its total assets. A multiple linear regression was conducted using ROA as the dependent variable and efficiency ratio (a measure of bank productivity measured in %), total risk based capital (a measure of capital adequacy in %), and net income ($thousands).

1. The Leverage cutoff value for the full regression model from question 1 is (round to TWO decimal places)

2. For the full model in question 1, the DFBeta2 value is considered large if it is greater than (round to THREE decimal places)

3. in a multiple regression model, the VARIANCE of the error term ? is assumed to be

SUMMARY OUTPUT Regression Statistics Multiple R 0.685669608 R Square 0.470142811 Full Model Adjusted R Square Standard Error 0.235584675 Observations 198 ANOVA df S MS F Significance F Regression 3 9.553593743 3.184531248 57.37879771 1.34745E-26 Residual 194 10.76702696 0.055500139 Total 197 20.32062071 Coefficients Standard Error t Stat P-value VIF Intercept 1.594045443 0.163519796 9.748333137 1.58457E-18 Net Income 1.22071E-05 3.50322E-06 3.484549254 0.000609383 1.12143 Efficiency Ratio -0.015282909 0.001759234 -8.687250374 1.53408E-15 1.19472 Total Risk Based Capital 0.022671698 0.004675071 4.849486971 253323E-06 1.09988 SUMMARY OUTPUT Regression Statistics Multiple R 0.317333614 arenbs y 0.100700623 Reduced Model Adjusted R Square 0.0961 12361 Standard Error 0.305346253 Observations 198 ANOVA df S MS F Significance F Regression 2046299159 2046299159 21.94744325 5.23106E-06 Residual 196 18.27432155 0.093236334 Total 197 20.32062071 Coefficients Standard Error t Stat P-value VIF Intercept 0.935229026 0.038300303 24.4183195 233679E-61 Net Income 2.00872E-05 4.28773E-06 4.684809841 5.23106E-06