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 agrees to be purchased by Banks A and B,what proportion of assets of Bank C should be taken by Banks A and B,respectively in order to have equal post-merger assets?
A) 52 percent and 48 percent.
B) 50 percent and 40 percent.
C) 56 percent and 44 percent.
D) 40 percent and 50 percent.

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 agrees to be purchased by Banks A and B,what proportion of assets of Bank C should be taken by Banks A and B,respectively in order to have equal post-merger assets?
A) 52 percent and 48 percent.
B) 50 percent and 40 percent.
C) 56 percent and 44 percent.
D) 40 percent and 50 percent.

Quizplus · Accepted Answer

To have equal post-merger assets, Banks A and B should acquire Bank C's assets in such a way that their total assets become equal. Solving the equation $50 + x = 60 + (90 - x)$ gives $x = 56$. Thus, Bank A should take 56% and Bank B should take 44% of Bank C's assets.

The Following Three FIs Dominate a Local Market and Their