STAT GU4205/GR5205 (Section 004) Linear Regression Models

HW6 by Dongrui Liu, Uni:dl3390

8.34

part(a)

\(Y_i = \beta_0 + \beta_1X_{1i} + \beta_2X_{2i} + \beta_3X_{3i} + \epsilon_i\)

part(b)

The response function for Commercial bank is \(Y_i = \beta_0 + \beta_1X_{1i} + \beta_2\)

The response function for Mutual savings bank is \(Y_i = \beta_0 + \beta_1X_{1i} + \beta_3\)

The response function for Savings and loan bank is \(Y_i = \beta_0 + \beta_1X_{1i} - \beta_2 - \beta_3\)

part(c)

1. Given the size of the bank, Commercial banks have \(\beta_2\) more profit or loss Compared to Non-Commercial banks.

2. Given the size of the bank, Mutual savings banks have \(\beta_3\) more profit or loss Compared to Non-Mutual savings banks.

3. Given the size of the bank, Savings and loan banks have \(-\beta_2 - \beta_3\) more profit or loss Compared to Non-Savings and loan banks.