Impact of Regulation

There are Regulations everywhere. 

Banks wanted to know whether the Regulation has an impact or not.  We can use McNemar's Test for this.

We can check whether portfolio was profitable before and after incorporating the Regulatory changes. And use McNemar's test to verify the same as below:-

DATA Regulation_Impact;

 INPUT SUBJECT $ BEFORE $ AFTER $;

DATALINES;

P1  P N

P2  P P

P3  N N

P4  P P

P5  P P

P6  N N

P7  P P

P8  P P

P9  N N

P10 P N

P11 P P

P12 N N

;

PROC FREQ DATA=Regulation_Impact;

 TABLES   BEFORE*AFTER /AGREE;

RUN;

Result as below:-

Statistics for Table of BEFORE by AFTER

McNemar's Test
Statistic (S)	2.0000
DF	1
Pr > S	0.1573

Conclusion:-

Since the Pr is .1573 result is not  by chance and hence Regulatory has an impact on the Portfolio.