Chapter 14, Problem 34PS

In Problem 14.4 on page 541, you used efficiency ratio and total risk-based capital to predict ROAA at a community bank (stored in CommunityBased). Using the results from that problem,

a. at the 0.05 level of significance, determine whether each independent variable makes a significant contribution to the regression model. On the basis of these results, indicate the most appropriate regression model for this set of data.

b. compute the coefficients of partial determination, $r^2{}_{Y1.2}\text{and}{r}^2{}_{Y2.1},$ and interpret their meaning.