1. A commercial bank with assets of $2 billion and costs of $200 million has acquired an...

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1. A commercial bank with assets of $2 billion and costs of $200 million has acquired an investment banking firm subsidiary with assets of $40 million and expenses of $15 million. After the acquisition, the costs of the bank are $180 million and the costs of the subsidiary are $20 million. Does the resulting merger reflect economies of scale or economies of scope?

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