Banking standards under the federal reserve system

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Monograph

Identifikator:: 1762969653

URN:: urn:nbn:de:zbw-retromon-142432

Document type:: Monograph

Title:: Banking standards under the federal reserve system

Place of publication:: Chicago

Publisher:: A. W. Shaw Company

Year of publication:: 1928

Scope:: xxxviii, 420 Seiten

Digitisation:: 2021

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

378 BANKING STANDARDS —o0.040+0.767 (AG)= AN....... +=0.12 =£0.02 cee) The probable errors of the constants K, and E./, + o.12 and + 0.02, respectively, were computed rigorously, as in the case of total expense, from the normal equations and the residuals, v, of the 408 observation equations. The constant — 0.040 = 0.12 has no significance in this case because it is 14 its own probable error. The interpretation of (7), therefore, is, that the most probable effect of a change of, say, 1 (0.1 of a point) in gross earnings from one year to the next is to change net earnings 0.767 (0.0767 of a point) in the same direction. From (7) and (6), therefore, one can obtain at once an ap- proximate measure of the relative influence of a change in gross earnings and of a change in total expense on a change in net earn- ings; that is, their respective importance is as 0.767 is to 0.497, or a change in gross earnings is (1 =— 1.54), 54% more in- fluential on net earnings than total expense. But this result (54%) is not the best obtainable because it has been shown in Table II that if one assumes gross earnings to influence net earnings equally in all groups, total expense does not influence net earnings equally in all groups. The evidence from Solution S;, which produced equation (7), is given in Table III, from which the mean v column, especially, shows that if it is assumed that total expense influences net earnings equally in all groups, gross earnings influences it unequally, particularly in Groups 3 and 4. The interpretation of the mean v in Group 3, + 1.2 4 0.3, is that (bearing in mind the above assumption) TasLE III RESIDUALS OF SOLUTION S, 1 Grour* Total I ~ a Sou oF +e +exz +182 ™ ~o tree tran " “n +30 | — 4-0 NuMBER 0% - . MEeaN v rr +o. 4 _- +- 40 | —1.0 =0.3 ” Number OF Banks To? MEAN nd ProsB- ABLE Error 4" 8 *5.2 — — 1079 2 __*34 | 1322 21 | ®7.9 oT 7 Is *3.6 260 #See Table I of Appendix I.

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