If Bank 1 Is Acquired by Bank 2, What Is

Multiple Choice

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

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.