The Evidence on Mergers Occurring Within the Hospital Industry Suggests

question 122

Multiple Choice

The evidence on mergers occurring within the hospital industry suggests that

• A) efficiency gains that resulted have been passed on to customers through lower prices.
• B) the mergers have tended to not have any significant effect on hospital prices.
• C) prices have risen slightly as some efficiency gains are passed on to customers after mergers.
• D) prices have risen after mergers.

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Definitions:

Natural Hedge

A transaction between two counterparties where both parties’ risks are reduced.

Derivatives Transaction

A financial agreement whose value is based on, or derived from, the value of an underlying asset or group of assets.

Arbitrage Profits

Profits generated from exploiting price differences of the same asset in different markets, buying low in one and selling high in another.

Risk Management

The process of identifying, assessing, and prioritizing risks followed by the application of resources to minimize, control, or eliminate them.