21-155 If Bank C Splits into Two Separate Institutions at ½

question 38

Multiple Choice

21-155 If Bank C splits into two separate institutions at ½ its original size each,what is the new Herfindahl (HHI) Index?

• A)60.
• B)340.
• C)2,538.
• D)2,847.
• E)10,000.

Distinguish between different levels of market concentration as indicated by the HHI.

Recognize the legal and regulatory framework for antitrust and merger control in the U.S., including the role of the Sherman Antitrust Act, the Clayton Act, the Federal Trade Commission Act, and the Celler-Kefauver Act.

Understand the implications of HHI values on the Justice Department’s approach to market concentration and mergers.

Apply knowledge of the HHI to assess monopoly power and market dominance.

---

Definitions:

JOBS Act

The Jumpstart Our Business Startups Act is legislation in the United States intended to encourage the funding of small businesses by easing various securities regulations.

Dow Jones

An American stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States.

Kickstarter

An online crowdfunding platform where individuals can donate money to support creative projects and ventures in exchange for rewards or equity.

Fundraising Project

A campaign or initiative undertaken to gather financial resources or investments for a specific purpose or project.