The Following Three FIs Dominate a Local Market and Their

question 41

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 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.

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Definitions:

Memory Skill

The ability to encode, store, and retrieve information effectively from one's mind.

Cognitive Development

The process by which individuals perceive, think, and gain understanding of their world through the interaction of genetic and learned factors.

Information Processing Approaches

Models that seek to identify the ways individuals take in, use, and store information.

Piaget's Approach

A theory of cognitive development that describes how children construct a mental model of the world through stages of learning and understanding.