TB MC Qu. 11-36 The current exchange rate is 1.00...

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.

Multiple Choice

• Bank A's dollar-denominated account at B will fall by $150,000.

• Bank B's dollar-denominated account at A will fall by $150,000.

• Bank A's euro-denominated account at B will fall by 100,000.

• Bank B's euro-denominated account at A will rise by 100,000.

  Incorrect