Euromarket investment and fund raisingA 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: $68 million funds to be raised (borrowed)

The management gathered the following data:

		Currency
Item	U.S $	MP	Yen
Spot exchange ratio		MP 11.58/U.S.$	Yen 108.34/U.S.$
Forecast percentage change		-3.05%	+1.53%
Interest Ratios
Nominal
Euromarket	3.99%	6.19%	2.04%
Domestic	3.73%	5.87%	2.11%
Effective
Euromarket	?	?	?
Domestic	?	?	?

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.)

This is everything that was in the question. Wherever I put a question mark this has to be solved. I couldn't understand it myself so I was hoping that you could help.