Consider the following question. For each choice, explain in one sentence why that choice is true or false.

A Canadian bank sells euros (EUR) and buys dollars (USD). By the end of the settlement process, the Canadian bank will hold, or record:

1. An increase in the balance of its USD account at the central bank of the US (Fed).

2. An increase in the balance of its USD account at the CLS Bank.

3. A decrease in the balance of its EUR account at its nostro account in the euro area.

4. A decrease in the balance of its reserve account at the central bank of Canada.

5. An increase in the balance of its account at the central bank of Canada.

6. An increase in the balance of its USD account at its nostro account in the U.S.