The Following Three FIs Dominate a Local Market and Their

Multiple Choice

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

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.
E) It is unlikely to approve because the post-merger HHI has increased by an amount over 5,000.