Question: The current exchange rate is 1.00 = $1.20. 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 = $1.20. 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 $120,000 using its correspondent relationship with Bank B. a. Bank B's euro-denominated account at A will rise by 100,000. b. Bank A's dollar-denominated account at B will increase by $120,000. c. Bank A's euro-denominated account at B will increase by 100,000. d. Bank B's dollar-denominated account at A will fall by $120,000.
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