Banking standards under the federal reserve system

Bibliographic data

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.

382 BANKING STANDARDS probable error squared for unit weight is taken as equal to o.1. The weighted mean value of E. is thus —- 0.46 + 0.05. In a similar manner, the weighted mean value of K, was deter- mined to be + 1.39 = 0.16. Substituting the above two values in (1), there is obtained +1.39—0.46 (AT)= AN... ....(8) which is an expression superior to (6) because in (6) the groups are weighted according to their respective number of banks, whereas in (8) the weighting of each constant is inversely as its own probable error squared. Hence, using (8) and (7), the best obtainable general measure, for any bank in this district picked at random, of the relative influence of the annual changes in gross earnings and in total expense upon net earnings is =) 1.67. That is, generally speaking, gross earnings are 4 57% more important than total expense in determining net earnings. TaBLE VI CoMPUTATION OF BEST GENERAL VALUE oF E’,, THE COEFFICIENT ExprRrRESSING THE M0ST GENERAL EFFECT OF A CHANGE IN TOTAL ExPENSE RaTios oN A CHANGE IN NET EARNINGS RATIOS Groun* Probable Error +=0.08 +0.09 0.10 = MN (Probable Error)? 0.00064 0.0081 0.0100 0.0144 Value of E'¢ —0.40 —0.30 —0.62 —0.33 Weight 15.6 12.4 10.0 8 Product, Weight X Probable Error —7.644 —~4.836 —6. 200 2.739 Ses Table I of Appendix I. . . ] Sum of products = —21.419; sum of weights =46.3; weighted mean = —o.46; probable error of weighted mean = =#%0.0%. GRAPHICAL REPRESENTATION OF RELATIVE EFFECTS OF CHANGES OF GROSS EARNINGS AND OF TOTAL EXPENSE RATIOS ON NET EARNINGS RATIOS In Chart I are shown the various regression lines, plotted with net earnings as ordinates and gross earnings and total expense as abscissae. The equation of each line is shown immediately

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