-If Bank 1 Is Acquired by Bank 2, What Is

question 81

Multiple Choice

$$\begin{array} { | c | r | } \hline \text { Bank } & \text { Asset Size } \\\hline 1 & \text { \$100 million } \\\hline 2 & \text { \$200 million } \\\hline 3 & \text { \$500 million } \\\hline\end{array}$$
-If Bank 1 is acquired by Bank 2, what is the impact on the market's HHI?

• A)An increase in the HHI of 1600.
• B)An increase in the HHI of 625.
• C)An increase in the HHI of 1563.
• D)A decrease in the HHI of 222.
• E)A decrease in the HHI of 360.

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Definitions:

Realistic Conflict Theory

A social psychology theory that proposes that intergroup conflict arises from competition for limited resources.

Prisoner's Dilemma

A situation in game theory where two individuals acting in their own self-interest do not result in the optimal outcome, illustrating the conflict between individual and collective rationality.

Social Dilemmas

Situations in which short term personal gain is at odds with the long-term good of the group.

Common Good

A concept that suggests certain goods, advantages, or benefits should be shared among all members of a society or community.