Large commercial banks maintain demand deposit accounts with one another, which facilitates the efficient functioning of the FX market

Bank A is in London. Bank B is in New York.

The current exchange rate is 1.00 = $1.25.

A currency trader employed at Bank A buys 320m from a currency trader at Bank B for $400 settled using its correspondent relationship.

The following is the balance sheet of Bank A and show the balance sheet after the above transactions happened

Bank A (London) 000s

Assets			Liabilities and Equity
	OLD	NEW		OLD	NEW
deposit at B	600	?	Bs $ deposit	$1160	?
$ deposit at B	$1600	?	Bs deposit	1200	?
Cash in the Vault	1200	?	Other Liabilities	600	?
Other Assets	800	?	Owners Equity	1152	?
Total	3,880	?	Total	3,880	?

(Marking Scheme;; 1mark for correct answer (1x10)=10marks)