CFA Practice Question

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CFA Practice Question

Consider three firms in industry X.

The market structure is equivalent to having ______ firms of the same size.

A. 0.4
B. 2.27
C. 3
Correct Answer: B

Herfindahl index = 0.22 + 0.62 + 0.22 = 0.44. 1/H = 2.27

User Contributed Comments 1

User Comment
AyshaAli Take the reciprocal of the H consitration to find the average concentration of each firm.
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