The following three FIs dominate a local market and their total assets are given below. $$\begin{array} { | c | r | }
\hline \text { Institution } & \text { Asset Size } \
\hline \text { Bank A } & \text { \$50 million } \
\hline \text { Bank B } & \text { \$60 million } \
\hline \text { Bank C } & \text { \$90 million } \
\hline
\end{array}$$ If Bank A acquires Bank C, what is the new Herfindahl-Hirschman Index (HHI)?
A)60.
B)100.
C)5,800.
D)5,050.
E)6,525.

Question

The following three FIs dominate a local market and their total assets are given below. $$\begin{array} { | c | r | } 
\hline \text { Institution } & \text { Asset Size } \
\hline \text { Bank A } & \text { \$50 million } \
\hline \text { Bank B } & \text { \$60 million } \
\hline \text { Bank C } & \text { \$90 million } \
\hline
\end{array}$$ If Bank A acquires Bank C, what is the new Herfindahl-Hirschman Index (HHI)?
A)60.
B)100.
C)5,800.
D)5,050.
E)6,525.

Quizplus · Accepted Answer

The Answer of The following three FIs dominate a local market and their total assets are given below. $$\begin{array} { | c | r | } 
\hline \text { Institution } & \text { Asset Size } \
\hline \text { Bank A } & \text { \$50 million } \
\hline \text { Bank B } & \text { \$60 million } \
\hline \text { Bank C } & \text { \$90 million } \
\hline
\end{array}$$ If Bank A acquires Bank C, what is the new Herfindahl-Hirschman Index (HHI)?
A)60.
B)100.
C)5,800.
D)5,050.
E)6,525.

The Following Three FIs Dominate a Local Market and Their