HHI index question

CFA Level II Corporate Finance
#1

Working on a mock right now, and this question seems like its an error. Not on errata though.

If a merger of a companies Pre-HHI is 1600 and Post HHI is 2000, change in HHI is 400.

A.) Possible Challenge

B.) Challenge

C.) No challenge

I thought this was obviously B. However, answer is A.

I thought the HHI index chart says to use post-merger category. Since this is over 1800, any increase of 50+ is a challenge, right?

#2

I thought it was 100 plus is a challenge. Regardless it went from 1600, broke 1800 and is now 2000. The answer is unequivocally B based on what you have written.

#3

B

#4

I recall HHI. This is a piss poor question, imho.

Even if it was accurate, it would have been a total memorization, zero critical thinking = not representative for real deal.

#5

Make us at least sum the squares of the market shares before and after right? lol