Which of the following definitions of a nostro account is correct?
A) A nostro account is an account held by a bank in a foreign country in the banks domestic currency.
B) A nostro account is an account held by a bank in a foreign country for cash collateralising OTC derivative positions with banks in that country.
C) A nostro account is an account held by a bank in a foreign country in the currency of that country.
D) A nostro account is an account held by a bank in its home country in a foreign currency.

Question

Quizplus · Accepted Answer

A nostro account is an account held by a bank in a foreign country in the currency of that country, allowing the bank to make and receive payments in that currency. Option A is incorrect because the account is held in the foreign currency, not the bank's domestic currency. Option B is incorrect because it describes a different type of account, a securities account. Option D is incorrect because it describes a different type of account, a vostro account.

Which of the Following Definitions of a Nostro Account Is