The Following Three FIs Dominate a Local Market and Their

question 47

Multiple Choice

The following three FIs dominate a local market and their total assets are given below.
$\begin{array}{lccc} \text {Institution }& \text { Asset Size}\\ \text {Bank A}&\$ 50 \text { million}\\ \text {Bank B}& \$ 60 \text { million}\\ \text {Bank C}&\$ 90 \text { million}\\\end{array}$
Under the 1982 guidelines,would the Fed approve the merger of Banks A and C?

• A)It is likely to approve because it is not a concentrated market.
• B)It is unlikely to approve because the post-merger HHI has increased by over 100.
• C)It is likely to approve because the post-merger HHI has increased by over 100.
• D)Likely to approve because the post-merger HHI has increased by less than 5,000.

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