Euromarket investment and fund raising A U.S.-based multinational company has two subsidiaries, one in Mexico (local currency, Mexican peso, MP) and one in Japan (local currency, yen, \). Forecasts of business operations indicate the following short-term financing position for each subsidiary (in equivalent U.S. dollars): Mexico: $80 million excess cash to be invested (lent) Japan: $66 million funds to be raised (borrowed) The management gathered the following data: Determine the effective interest rates for all three currencies in both the Euromarket and the domestic market; then indicate where the funds should be invested and raised. (Note: Assume that because of local regulations, a subsidiary is not permitted to use the domestic market of any other subsidiary.) The effective interest rate in the Euromarket for the US$ is 4.04%. (Round to two decimal places The effective interest rate in the Euromarket for the MP is 3.09 %. (Round to two decimal places. The effective interest rate in the Euromarket for the is %. (Round to two decimal places.) Data table (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Currency Item US $ Spot exchange rates Forecast percentage change MP MP11.61/US$ - 2.96% 107.78/US$ +1.55% Interest rates Nominal Euromarket 4.04% 6.23% Domestic 3.75% 5.85% 1.97% 2.15% Effective Euromarket Domestic answer