The Citibank trading desk quotes a buy rate of 1.25 and a sell rate of 2.00 for the dollar/euro exchange rate S$/€.Suppose that traders are continually selling dollars to Citibank,leaving Citibank with a surplus of dollars.How should Citibank adjust its rates to "square off" its position?
A) Lower both buy and sell rates.
B) Raise both buy and sell rates.
C) Lower the buy rate, but raise the sell rate.
D) Raise the buy rate, but lower the sell rate.
Correct Answer:
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