The Current Exchange Rate Is €1

question 27

Multiple Choice

The current exchange rate is €1.00 = $1.50.Compute the correct balances in Bank A's correspondent account(s) with Bank B if a currency trader employed at Bank A buys €100,000 from a currency trader at Bank B for $150,000 using its correspondent relationship with Bank B.

• A)Bank A's dollar-denominated account at B will fall by $150,000.
• B)Bank B's dollar-denominated account at A will fall by $150,000.
• C)Bank A's pound-denominated account at B will fall by €100,000.
• D)Bank B's pound-denominated account at A will rise by €100,000.

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Definitions:

Participate

To take part or become involved in a particular activity, event, or situation.