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

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.