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: $60 million funds to be raised (borrowed) The management gathered the following data: B. Determine the effective interest rates for all three currencies in both the Euromarket and the domestic market; then indicate where the funds should be invested and raised. (Note: Assume that because of local regulations, a subsidiary is not permitted to use the domestic market of any other subsidiary.) The effective interest rate in the Euromarket for the US$ is %. (Round to two decimal places.) The effective interest rate in the Euromarket for the MP is %. (Round to two decimal places.) Data Table The effective interest rate in the Euromarket for the Y is %. (Round to two decimal places.) (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) The effective interest rate in the domestic market for the US$ is %. (Round to two decimal places.) e The effective interest rate in the domestic market for the MP is %. (Round to two decimal places.) US $ Currency MP MP 11.60/US$ - 3.00% The effective interest rate in the domestic market for the Yis%. (Round to two decimal places.) 108.25/US$ + 1.50% Following the assumption outlined in the problem, where should the $80 million fund be invested? (Select the best answer Item Spot exchange rates Forecast percentage change Interest rates Nominal Euromarket Domestic Effective Euromarket Domestic 4.00% 3.75% 6.20% 5.90% O A. $80 million excess is to be invested in the US$ domestic market. OB. $80 million excess is to be invested in the Y domestic market. 2.00% 2.15% O C. $80 million excess is to be invested in the US$ Euromarket. 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: $60 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 domestic market for the is \%. (Round to two decimal places.) Following the assumption outlined in the problem, where should the $80 million fund be invested? (Select the best answer 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.) O A. $80 million excess is to be invested in the US$ domestic market. OB. $80 million excess is to be invested in the Y domestic market. O C. $80 million excess is to be invested in the US$ Euromarket. OD. $80 million excess is to be invested in the Y Euromarket. US $ Currency MP MP11.60/US$ - 3.00% \ 108.25/US$ +1.50% Following the assumption outlined in the problem, where should the $60 million fund be raised? (Select the best answerb O A. $60 million to be raised in the Y domestic market. Item Spot exchange rates Forecast percentage change Interest rates Nominal Euromarket Domestic Effective Euromarket Domestic 4.00% 3.75% 6.20% 5.90% 2.00% 2.15% OB. $60 million to be raised in the MP domestic market. O C. $60 million to be raised in the MP Euromarket. OD. $60 million to be raised in the Y Euromarket. IL | | 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: $60 million funds to be raised (borrowed) The management gathered the following data: B. Determine the effective interest rates for all three currencies in both the Euromarket and the domestic market; then indicate where the funds should be invested and raised. (Note: Assume that because of local regulations, a subsidiary is not permitted to use the domestic market of any other subsidiary.) The effective interest rate in the Euromarket for the US$ is %. (Round to two decimal places.) The effective interest rate in the Euromarket for the MP is %. (Round to two decimal places.) Data Table The effective interest rate in the Euromarket for the Y is %. (Round to two decimal places.) (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) The effective interest rate in the domestic market for the US$ is %. (Round to two decimal places.) e The effective interest rate in the domestic market for the MP is %. (Round to two decimal places.) US $ Currency MP MP 11.60/US$ - 3.00% The effective interest rate in the domestic market for the Yis%. (Round to two decimal places.) 108.25/US$ + 1.50% Following the assumption outlined in the problem, where should the $80 million fund be invested? (Select the best answer Item Spot exchange rates Forecast percentage change Interest rates Nominal Euromarket Domestic Effective Euromarket Domestic 4.00% 3.75% 6.20% 5.90% O A. $80 million excess is to be invested in the US$ domestic market. OB. $80 million excess is to be invested in the Y domestic market. 2.00% 2.15% O C. $80 million excess is to be invested in the US$ Euromarket. 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: $60 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 domestic market for the is \%. (Round to two decimal places.) Following the assumption outlined in the problem, where should the $80 million fund be invested? (Select the best answer 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.) O A. $80 million excess is to be invested in the US$ domestic market. OB. $80 million excess is to be invested in the Y domestic market. O C. $80 million excess is to be invested in the US$ Euromarket. OD. $80 million excess is to be invested in the Y Euromarket. US $ Currency MP MP11.60/US$ - 3.00% \ 108.25/US$ +1.50% Following the assumption outlined in the problem, where should the $60 million fund be raised? (Select the best answerb O A. $60 million to be raised in the Y domestic market. Item Spot exchange rates Forecast percentage change Interest rates Nominal Euromarket Domestic Effective Euromarket Domestic 4.00% 3.75% 6.20% 5.90% 2.00% 2.15% OB. $60 million to be raised in the MP domestic market. O C. $60 million to be raised in the MP Euromarket. OD. $60 million to be raised in the Y Euromarket. IL | |