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Using regression analysis on historical loan losses, a bank has estimated the following: Xc = 0.002+0.8X, and XR = =0.002+1.8X, where Xc equals the loss
Using regression analysis on historical loan losses, a bank has estimated the following: Xc = 0.002+0.8X, and XR = =0.002+1.8X, where Xc equals the loss rate in the commercial sector and X, equals the loss rate in the retail sector and X, equals loss rate for its total loan portfolio. 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: Xc = 0.002+0.8X, and XR = =0.002+1.8X, where Xc equals the loss rate in the commercial sector and X, equals the loss rate in the retail sector and X, equals loss rate for its total loan portfolio. 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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