If the Federal Reserve Decides to Purchase Securities from the Bank

Multiple Choice

If the Federal Reserve decides to purchase securities from the Bank of England at the latter's request and the Fed adds those securities to its portfolio then which of the following effects will occur?

A) U.S. bank reserves will decline
B) U.S. bank reserves will rise
C) Interest rates are likely to rise, other factors held equal
D) Security prices are likely to fall, other factors held equal
E) None of the above