Profitability remains a challenge for banks and thrifts with less thanâ€‹ $2 billion of assets. The...

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Profitability remains a challenge for banks and thrifts withless thanâ€‹ $2 billion of assets. The business problem facing a bankanalyst relates to the factors that affect return on assetsâ€‹ (ROA),an indicator of how profitable a company is relative to its totalassets. Data collected from a sample of 20 community banks includethe ROAâ€‹ (%), the efficiency ratioâ€‹ (%), as a measure of bankproductivityâ€‹ (the lower the efficiencyâ€‹ ratio, theâ€‹ better), andtotalâ€‹ risk-based capitalâ€‹ (%), as a measure of capital adequacy.Complete partsâ€‹ (a) throughâ€‹ (g) below.
a. State the multiple regression equation.
Let X1i represent the efficiency ratioâ€‹ (%) and let X2irepresent the totalâ€‹ risk-based capitalâ€‹ (%).
Yi=( )+( Â Â ) X1i+ ( ) X2i
â€‹(Round the constant to two decimal places as needed.)
ROA Efficiency Ratio Total RiskBased Capital
0.54 74.69 15.33
4.41 86.31 10.96
1.55 71.04 14.3
1.29 54.81 19.19
1.07 70.15 16.61
4.55 86.21 20.78
1.3 51.32 24.04
1.1 79.47 10.53
0.73 61.73 12.5
1.17 62.47 11.67
0.6 63.31 13.94
1.23 58.77 14.92
0.9 72.43 15.52
0.8 72.42 17.97
1.06 57.09 14.62
1.06 59.37 14.06
0.9 64.53 13.64
1.75 55.68 17.42
7.27 81.4 27.77
0.97 55.14 15.44
1.7125 66.917 16.0605
How is this solved in excel? thanks

Answer & Explanation Solved by verified expert

3.7 Ratings (466 Votes)

first enter data into excel then click on data tabThen click on Data Analysis and select RegressionIn Input range Y ROAand in Input range X select Efficiency Ratio TotalRiskBased See Answer

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ROA	Efficiency Ratio	Total RiskBased Capital
0.54	74.69	15.33
4.41	86.31	10.96
1.55	71.04	14.3
1.29	54.81	19.19
1.07	70.15	16.61
4.55	86.21	20.78
1.3	51.32	24.04
1.1	79.47	10.53
0.73	61.73	12.5
1.17	62.47	11.67
0.6	63.31	13.94
1.23	58.77	14.92
0.9	72.43	15.52
0.8	72.42	17.97
1.06	57.09	14.62
1.06	59.37	14.06
0.9	64.53	13.64
1.75	55.68	17.42
7.27	81.4	27.77
0.97	55.14	15.44
1.7125	66.917	16.0605