Suppose That There Are Two Industries, a and B

question 104

Multiple Choice

Suppose that there are two industries, A and B. There are five firms in industry A with sales at $5 million, $2 million, $1 million, $1 million, and $1 million, respectively. There are four firms in industry B with equal sales of $2.5 million for each firm. The HHI for industry A is:

• A) 3,200.
• B) 2,800.
• C) 1,800.
• D) 2,500.

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Definitions:

Expected Dollar Return

The forecasted amount of money in dollars that an investment is expected to return over a specific period.

Rights Offering

A way for companies to raise capital by giving existing shareholders the right to purchase additional shares at a discount.

Subscription Price

The cost at which investors can buy shares or units of an investment, often seen in mutual funds or newly issued stocks.

Shares

Units of ownership in a corporation or financial asset, giving holders a proportion of the company's profits and assets.