The following three FIs dominate a local market and their total assets are given below.
$\begin{array}{lccc}
\text {Institution }& \text { Asset Size}\
\text {Bank A}&\$ 50 \text { million}\
\text {Bank B}& \$ 60 \text { million}\
\text {Bank C}&\$ 90 \text { million}\
\end{array}$
If Bank C splits into two separate institutions at ½ its original size each,what is the new Herfindahl-Hirschman Index (HHI)?
A)60.
B)340.
C)2,538.
D)2,847.

Question

The following three FIs dominate a local market and their total assets are given below. 
$\begin{array}{lccc}
  \text {Institution  }&  \text { Asset Size}\
  \text {Bank A}&\$ 50    \text { million}\
  \text {Bank B}& \$ 60   \text { million}\
  \text {Bank  C}&\$ 90  \text {  million}\
\end{array}$
 If Bank C splits into two separate institutions at ½ its original size each,what is the new Herfindahl-Hirschman Index (HHI)?
A)60.
B)340.
C)2,538.
D)2,847.

Quizplus · Accepted Answer

The Answer of The following three FIs dominate a local market and their total assets are given below. 
$\begin{array}{lccc}
  \text {Institution  }&  \text { Asset Size}\
  \text {Bank A}&\$ 50    \text { million}\
  \text {Bank B}& \$ 60   \text { million}\
  \text {Bank  C}&\$ 90  \text {  million}\
\end{array}$
 If Bank C splits into two separate institutions at ½ its original size each,what is the new Herfindahl-Hirschman Index (HHI)?
A)60.
B)340.
C)2,538.
D)2,847.

The Following Three FIs Dominate a Local Market and Their