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Forums › FIA Forums › General FIA Forums › Regression and Hypotheses
Presented below is the regression result on the determinants of bank profitability of a country banks.
ROA=2.840(2.301) + 0.085CAP(0.125) + 0.259LAD(0.055) + 0.056DEP(0.026) – 0.035Z(0.005)
Adjusted r2 = 0.645
N.B Figures in parentheses are the standard erros of the estimates.
ROA-Return of Assets(measure of profitability)
CAP-Capital Adequacy
LAD-Loans and Advances
DEP-Total Deport
Z-Bank Size
Required:
(i) Conduct the relevant test of hypotheses at 5% level of significant taken the critical value of “T” = 2.655 and explain the result of the study.
(ii) Explain the significant of the adjusted r2 = 0.645.
(iii) What conclusion can you draw from the study.
Please I don’t get the question.