The Current Exchange Rate Is €1

Multiple Choice

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.

A) Bank A's dollar-denominated account at B will fall by $150,000.
B) Bank B's dollar-denominated account at A will fall by $150,000.
C) Bank A's euro-denominated account at B will fall by €100,000.
D) Bank B's euro-denominated account at A will rise by €100,000.