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A Nostro account is best described as:
AAn account exclusively for retail customers
BTheir account held with us in local currency
CA third-party account in a third currency
DOur account held with a foreign correspondent bank
Answer & Solution
Correct answer: D. Our account held with a foreign correspondent bank
1. Identify what the question asks: this concept maps to nostro (§4).
2. Apply the framework or formula relevant to the topic.
3. Eliminate distractors and arrive at the correct option (D).
_Source: ICAI BoS CA Final Paper 2, Ch 10 "Foreign Exchange Exposure and Risk Management"_
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