Question
The current exchange rate is 1.00 = $2.00. Compute the correct balances in Bank A's correspondent account(s) with Bank B if a currency trader employed
The current exchange rate is 1.00 = $2.00. Compute the correct balances in Bank A's correspondent account(s) with Bank B if a currency trader employed at Bank A buys 45,000 from a currency trader at Bank B for $90,000 using its correspondent relationship with Bank B.
A. Bank A's dollar-denominated account at B will fall by $90,000.
B. Bank B's dollar-denominated account at A will rise by $90,000.
C. Bank A's pound-denominated account at B will rise by 45,000.
D. Bank B's pound-denominated account at A will fall by 45,000.
E. All of the above are correct
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started