When an individual or firm in the United States requests that a bank sell foreign exchange,the bank will probably
A)call a foreign bank and arrange a purchase.
B)call the central bank and arrange a purchase.
C)call another bank customer with foreign exchange holdings.
D)call a foreign exchange broker and arrange a purchase.

Question

Quizplus · Accepted Answer

When an individual or firm in the United States requests that a bank sell foreign exchange, the bank will most likely call a foreign exchange broker and arrange a purchase. Foreign exchange brokers act as intermediaries between buyers and sellers of foreign currency and help banks find the best exchange rates and liquidity for their clients. Calling a foreign bank (choice A) or the central bank (choice B) may not be the most efficient or cost-effective way to obtain foreign exchange, and calling another bank customer with foreign exchange holdings (choice C) is unlikely as the bank would need to have a customer with the exact currency needed for the transaction.

When an Individual or Firm in the United States Requests