The Following Three FIs Dominate a Local Market and Their

question 106

Multiple Choice

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 A acquires Bank C,what is the new Herfindahl-Hirschman Index (HHI) ?

• A)60.
• B)100.
• C)5,800.
• D)5,050.

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Definitions:

Incorporated NFP Organizations

Nonprofit organizations that have undergone the process of incorporation, granting them legal identity separate from their members or directors.

Share Capital

The total value of a company's shares that it has issued to shareholders, representing the funding a company has received from shareholders in exchange for shares.

NFP Organizations

Not-for-Profit Organizations; entities that operate for purposes other than generating profit, focusing instead on social, educational, or charitable objectives.

Deferred Contribution

Contributions or payments postponed to a future date, often used in the context of retirement savings plans or deferred compensation agreements.