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: $86 million excess cash to be invested (lent) Japan: $67 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.) G 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.) Item US $ V Currency MP MP11.64/US$ -2.95% Spot exchange rates 108.39/US$ +1.45% Forecast percentage change Interest rates Nominal 6.23% 1.97% Euromarket Domestic 3.98% 3.77% 5.92% 2.16% Effective Euromarket Domestic Print Done 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: $86 million excess cash to be invested (lent) Japan: $67 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.) G 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.) Item US $ V Currency MP MP11.64/US$ -2.95% Spot exchange rates 108.39/US$ +1.45% Forecast percentage change Interest rates Nominal 6.23% 1.97% Euromarket Domestic 3.98% 3.77% 5.92% 2.16% Effective Euromarket Domestic Print Done