StateTerritory Assets IntBearingDep Equity Ln(Assets) Ln(IntBearingDep) Ln(Equit

Question

StateTerritory Assets IntBearingDep Equity Ln(Assets) Ln(IntBearingDep) Ln(Equity) Alabama 230.6 131.6 32.3 5.440684608 4.879767019 3.47506723 Alaska 5.1 2.2 0.7 1.62924054 0.78845736 -0.356674944 Arizona 18.7 11.4 1.9 2.928523524 2.433613355 0.641853886 Arkansas 62.2 42.9 7.4 4.130355 3.758871826 2.00148 California 548.8 294.2 70.3 6.307734076 5.684259808 4.252771799 Colorado 43.5 28.5 4.1 3.772760938 3.349904087 1.410986974 Connecticut 25.8 15.4 2.6 3.250374492 2.734367509 0.955511445 Delaware 1005 582 140.8 6.91274282 6.366470448 4.947340444 District of Columbia 2 1.2 0.2 0.693147181 0.182321557 -1.609437912 Florida 126.4 82.2 14.3 4.839451482 4.409155302 2.660259537 Georgia 266.7 160 32 5.586124431 5.075173815 3.465735903 Guam 1.7 1.2 0.1 0.530628251 0.182321557 -2.302585093 Hawaii 37.7 22.6 4.4 3.629660094 3.117949906 1.481604541 Idaho 5.9 3.5 0.7 1.774952351 1.252762968 -0.356674944 Illinois 375.9 230.8 40.9 5.929323151 5.441551535 3.711130063 Indiana 62.7 42.2 6.9 4.138361448 3.742420221 1.931521412 Iowa 69 46.7 7.1 4.234106505 3.843744165 1.960094784 Kansas 51.8 34.6 5.7 3.947390149 3.543853682 1.740466175 Kentucky 53.8 36.3 5.9 3.985273467 3.591817741 1.774952351 Louisiana 54.5 35.1 5.9 3.998200702 3.55820113 1.774952351 Maine 23.3 19.1 2.1 3.148453361 2.949688335 0.741937345 Maryland 25.6 16 2.7 3.242592351 2.772588722 0.993251773 Massachusetts 292.6 153.2 24.1 5.678806489 5.031744257 3.18221184 Michigan 44.8 30 4.8 3.802208139 3.401197382 1.568615918 Minnesota 59.5 39.7 6.2 4.085976313 3.681351188 1.824549292 Mississippi 75.6 46.9 8.7 4.325456283 3.848017675 2.163323026 Missouri 129.6 82.1 12.9 4.864452784 4.407938016 2.557227311 Montana 26.4 16 3.1 3.27336401 2.772588722 1.131402111 Nebraska 57.5 36.6 5.9 4.051784948 3.60004824 1.774952351 Nevada 21.1 7.8 5.1 3.04927304 2.054123734 1.62924054 New Hampshire 3.3 2.3 0.3 1.193922468 0.832909123 -1.203972804 New Jersey 54.2 34 5.5 3.992680908 3.526360525 1.704748092 New Mexico 15.4 9.7 1.7 2.734367509 2.272125886 0.530628251 New York 749.9 418.4 85.7 6.619939864 6.036437913 4.450852826 North Carolina 1696.7 866.2 208.6 7.436440467 6.764115829 5.340418543 North Dakota 23.4 15.9 2.2 3.152736022 2.766319109 0.78845736 Ohio 2687.3 1334.4 254.3 7.896292251 7.196237032 5.538514672 Oklahoma 84.6 57.3 8.1 4.437934267 4.048300624 2.091864062 Oregon 19.1 11.6 2.7 2.949688335 2.451005098 0.993251773 Pennsylvania 145.1 95.3 17.8 4.97742316 4.557029811 2.879198457 Rhode Island 101.2 53.2 16.3 4.617098757 3.974058396 2.791165108 South Carolina 35.7 23.8 3.7 3.575150689 3.169685581 1.30833282 South Dakota 2786.7 1636 293.2 7.932613379 7.400009517 5.68085497 Tennessee 82.4 53.8 9.4 4.411585437 3.985273467 2.240709689 Texas 358.8 195.1 40.2 5.88276513 5.273512248 3.693866996 Utah 394.3 285.7 50.7 5.977112041 5.654942309 3.925925911 Vermont 4.1 2.8 0.4 1.410986974 1.029619417 -0.916290732 Virginia 563.1 330 69.4 6.333457232 5.799092654 4.239886868 Washington 59.9 36 7.6 4.092676505 3.583518938 2.028148247 West Virginia 27.9 18.6 3.1 3.328626689 2.923161581 1.131402111 Wisconsin 83 53.5 9.9 4.418840608 3.979681654 2.292534757 Wyoming 6.5 4.5 0.6 1.871802177 1.504077397 -0.510825624 Puerto Rico 67.6 41.1 8 4.213607983 3.716008122 2.079441542 2. Examine the relationship between each pair of variables in Table 11.2. nsured commercial banks by state or other area TABLE 11.2 Deposits Equity Deposits Equity Assets (S billions) S billions) State or area Assets (S billions S billions) State or area Alabama 230.6 26.4 6.0 Alaska 2.2 0.7 Nebraska 57.5 36.6 5.9 Arizona 8.7 78 62.2 42.9 7A New Hampshire 3.3 0.3 Arkansas 548.8 294.2 California 70.3 New Jersey 54.2 340 5.5 Colorado 43,5 28,5 New Mexico 5.4 9.7 25.8 5.4 26 New York 749.9 418.4 85.7 1408 North Carolina 696.7 866.2 2086 Delaware 1005.0 582.0 District of Columbia 2.2 2.0 0.2 North Dakota 23.4 5.9 Florida 26.4 82.2 4.3 2687.3 1334.4 254.3 846 57.3 266.7 32.00 Oklahoma Georgia 60.0 2.7 Hawai 37,7 22.6 4.4 Pennsylvania 45 95.3 7,8 Idaho 5.9 3.5 0.7 Rhode Island 101.2 53.2 6.3 375.9 230.8 40.9 South Carolina 35.7 23.8 3.7 Illinois 62.7 6.9 South Dakota 2786.7 636.0 293.2 Indiana 42.2 Iowa 69.0 46.7 Tennessee 82.4 53.8 9.4 34,6 5.7 Texas 358.8 40,2 Kentucky 53.8 36.3 5.9 Utah 394.3 285.7 50.7 54.5 35.1 5.9 0,4 Maine 23.3 Virginia 330.0 69,4 Maryland 25.6 6.0 2.7 Washington 59.9 7.6 292.6 53.2 24.1 West Virginia 27.9 186 Massachusetts 4.8 Wisconsin Michigan 44,8 30.0 83.0 53.5 9.9 Minnesota 59.5 39.7 Wyoming 0,6 8.7 Puerto Rico Mississippi 75.6 46.9 67.6 41.1 8.0 29,6 82 2.9 Missouri The logarithm transformation pulls in the long tail of a skewed distribution. It is common to use logarithms to make economic and financial data more symmetric before doing inference. Run the regression using the logarithm-transformed variables and report the least-squares equation. Give your answers to 5 decimal places.

Explanation / Answer

Answer1 = 1.13440

Answer2 = 0.62033

Answer3 = 0.38007

so regression eq:

Y = 1.1344+0.62033X1 +0.38007X2

Regression output obtained by fitting model using logarithmic data sets considering IntBearingDep and Equity as predictor variable in R:

Coefficients:
Estimate Std. Error t value Pr(>|t|)
(Intercept) 1.13440 0.06759 16.78 < 2e-16 ***
Ln.IntBearingDep. 0.62033 0.03611 17.18 < 2e-16 ***
Ln.Equity. 0.38007 0.03438 11.06 4.92e-15 ***

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