A commercial bank with assets of $2 billion and expenses of $200 million has acquired an investment

Question:

A commercial bank with assets of $2 billion and expenses of $200 million has acquired an investment banking firm subsidiary with assets of $40 million and expenses of $15 million. After the acquisition, the expenses of the bank are $180 million and the expenses of the subsidiary are $20 million. Does the resulting merger reflect economies of scale or economies of scope?
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Financial Institutions Management A Risk Management Approach

ISBN: 978-0071051590

8th edition

Authors: Marcia Cornett, Patricia McGraw, Anthony Saunders

Question Posted: