Which One of the Following Is Most Likely to Increase

question 169

Multiple Choice

Which one of the following is most likely to increase the Herfindahl index of a particular industry?

• A) a conglomerate merger
• B) a vertical merger
• C) a price-fixing arrangement among all the industry firms
• D) a horizontal merger

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Definitions:

Compounded Nominal Rate

The rate of interest quoted for a period, usually a year, without taking into account the effect of compounding within that period.

Effective Rate

The actual interest rate of an investment or loan, taking into account the effect of compounding interest as opposed to the nominal or stated rate.

Annuity

A monetary product designed to deliver regular payouts, mainly aimed at funding retirees' income needs.

Compounded Monthly

A compound interest calculation method where interest is added to the principal balance each month.